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MFAA and FBAA defend brokers against RBA commission claim

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Australian Broker | 26 Mar 2015, 10:59 AM Agree 0
Both the MFAA and the FBAA have come out in defence of brokers after the Reserve Bank warned banks over increasing broker commissions, saying it could create “significant amounts” of risky lending
  • The Observer | 26 Mar 2015, 11:19 AM Agree 0
    Here are your MFAA & FBAA fees at work.
  • SA Broker | 26 Mar 2015, 11:27 AM Agree 0
    Uneducated and poorly researched by RBA.

    Branch lenders can also approve loans under their own DLA if credit score allows. Every loan a broker does gets scrutinized by a Credit Manager.

    RBA should have to back up comments with evidence.
  • Rocket Scientist | 26 Mar 2015, 11:34 AM Agree 0
    How can broker loans be more risky when the bank still needs to assess the application and approve it? Come on RBA you're better than that!
  • MCC | 26 Mar 2015, 11:36 AM Agree 0
    Thank you Siobhan. The conflict of interest issue where the lending staff in the direct channel receive bonuses etc centred around their performance appraisal automatically puts credit quality at risk. This has always been the case & where lending staff have been found to breach the relevant codes & laws they are dealt with internally. Statistics of these breaches do not find their way to the external media & Government regulatory bodies. As I have said before it's simple for APRA to ask the internal auditing areas of the relevant banks for volume in dollars & numbers of internal lending breaches. Then make that knowledge public!
  • AF | 26 Mar 2015, 11:38 AM Agree 0
    I wonder if Glen will have the guts to meet with Siobhan. She will make him look very ordinary.
  • Well informed | 26 Mar 2015, 11:41 AM Agree 0
    Very disappointing to hear such comments from the RBA. Normally they seem such sensible, logical, and well considered professionals..
  • Papery | 26 Mar 2015, 11:48 AM Agree 0
    IS THE RBA KIDDING???? Hey Mr Salaried RBA spokesperson... Come work a mile in my shoes for three months... The remuneration isn't that spectacular...
  • GC | 26 Mar 2015, 12:02 PM Agree 0
    Mr Stevens hasn't acknowledge the fact that the incomes to brokers is just catching up to where they were before the GFC and we have had a long drought untill now. Just may be a good idea to change his pay structure without any consultation with him and see how he likes it. This statement is just a show or arrogance by a public servant who needs to look in the mirror.
  • QEDRisk | 26 Mar 2015, 12:44 PM Agree 0
    Well said Siobhan. Hmmm - and in broker world, their conflicts of interest are disclosed with the client in the form of a Credit Proposal Disclosure Document!! Branch jockeys provide no such thing. Imagine if they did?? "If I write $X this month I'm going to get $YY performance bonus."

    RBA and APRA need to get their heads out of their butts on this one.
  • JB | 26 Mar 2015, 03:53 PM Agree 0
    How does the RBA believe increasing commissions can create significant amounts of risky lending? Does decreasing commissions then reduce the amount of risky lending? The old chestnut that brokers represent clients that are risky has long been disproved so this seems like just another self serving broker bashing exercise with no substance. The onus is on the banks to maintain their prudent lending criteria which they certainly have. The level of broker remuneration is irrelevant to lender criteria and regular jibes by media and now the RBA with zero evidence just confirm their ignorance on the broking industry.
  • Annoyed | 26 Mar 2015, 11:46 PM Agree 0
    What an ignorant & ill-informed comment. Clearly made by someone completely out of touch with reality! Maybe they should be educated on Brokers actual remuneration. Aside from the hours & hours of work & research involved before an application can even be submitted to a Lender with the possibility of not getting paid for months, if at all, but more importantly what other professional or trades person actually has ALL of their income "clawed back" 18mths-2yrs after the work was completed?
  • Brendan | 28 Mar 2015, 08:46 PM Agree 0
    It's an odd statement.

    Does the RBA think Brokers who have been writing near half of all home loans, have a:-
    A) Different credit policy than the Bank.
    B) Delegated approval to approve loans themselves.
    C) Or, suggesting that a higher commission will lead to fraud?

    Banks are price makers and brokers are price takers. That is the structure of the industry yesterday, today and tomorrow. Brokers need to work harder than a branch home loan writer and they will, over time, do better.
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