The FBAA has welcomed the latest ASIC review, which will investigate brokers’ consideration of consumer requirements and objectives when it comes to interest-only lending.
Yesterday, Australian Broker
broke the news of ASIC’s plans to undertake a review of mortgage brokers in regards to interest-only lending, after ASIC senior executive leader – deposit takers, credit & insurers, Michael Saadat
, told brokers at the FBAA conference on Friday that the regulator would be shifting its focus from lenders to brokers.
The chief executive of the FBAA, Peter White, has now responded, saying that it is only fair brokers are also investigated, however, he says ASIC must remember that it is the lenders who ultimately write the rules – not the broker.
“Lenders make the loan and lending rules that brokers must follow and in line with the brokers own responsible lending obligations, the vast majority are not intentionally breaking the law and are applying responsible lending considerations to the loans they arrange for borrowers,” White said.
In his address, Saadat also raised concerns about consequences when brokers shifted business towards lenders who require less information and checks, however, White has dismissed those concerns.
“At all times, brokers have the borrowers best interests at heart while also being aware of the borrowers desires which are not the influencing factor as they are not always in line with responsible lending obligations.”
White is now reminding brokers to remain open, professional and transparent about the forthcoming review.
“This is all about education on both sides but from our end, it is vital we continue showing them how we work and the practices we have in place to eliminate any need for potential restrictive or more stringent regulation,” White said.