A former ACCC chairman has called out Australia's banks for not passing on rate cuts, and a broker association head has applauded the comments.
Former ACCC chair Allan Fels told News Ltd last week that banks were "ridiculously slow" in passing on rate cuts when funding costs fell, and argued that Australians were "owed" a rate cut of at least 25bps. FBAA president Peter White has backed the call, and said it is little wonder consumers are cynical about the Australian banking system.
"Here you have long term experts and researchers supporting the fact that costs of wholesale funds have come down and the banks have not passed that on to variable rate borrowers. While we recognise the importance of shareholder returns and a strong profitable banking system, it also must be fair to consumers, and this is not," White said.
White said Fels' comments could give a boost to the broker channel, and urged brokers to position themselves as the "key to competition" within their local communities.
“With these recent comments from Allan Fels and the current publicity around interest rates, now is the ideal time for brokers to speak up and remind consumers why our role is so important and beneficial to them.”