Worried about clawbacks, cancelled accreditations or various other measures imposed on brokers by lenders? Increased lender competition could put such measures to rest.
That's the claim of MFAA chief executive Phil Naylor. Naylor has told the Independent Finance Brokers Forum that increased competition among lenders could be the panacaea to some of the provisions placed on brokers.
"With clawbacks and some of the issues with lenders, a lot of these things happen because they can. My argument is if we have a more competitive market you're going to be less likely to see those restrictive, difficult policies coming out," Naylor said.
Naylor argued that, in spite of lenders competing hard for broker and borrower business, the variety of lenders competing was still at a lower level than prior to the GFC.
"There has to be something done about the lack of competition in the lending market. I know the major lenders say they do compete, but they essentially compete amongst themselves. We haven't got the level of competition we had pre-GFC," he said.
Competition, Naylor said, would not only benefit consumers, but would ease some of the burdens lenders are currently able to place on brokers.
"It's very important to consumers, but we think also on the other side of the fence, for the broking sector, when there's more competition in the market there will be less onerous and unnecessary compliance and punitive provisions put on you," he said.
Naylor pointed to the lending landscape prior to the GFC as proof that more lender competition meant less onerous provisions for brokers.
"All the antagonistic things we have in the industry are because we don't have enough competition. You remember when non-bank lenders were strong in Australia? Did they have clawback clauses? No. Were the lenders' clawback clauses that existed when the non-banks were in the market as aggressive as they are now? No. What they are now is because of the lack of competition."