Commission should recognise ASIC review: AFG

by Miklos Bolza20 Dec 2017
National aggregator AFG has urged the Royal Commission to recognise the immense scrutiny that the mortgage broking sector has been and continues to be under. 

With the Commission confirmed to delve into the broking sector as well, AFG has highlighted investigations such as the ASIC broker remuneration review and the important role that brokers play in creating a competitive market for consumers.

“The mortgage broking channel accounts for more than 53% of the Australian lending market so it is unsurprising that we are in the mix, however 2017 has also been marked by significant regulatory scrutiny of our industry,” said AFG CEO David Bailey.

As well as the ASIC review, the Productivity Commission’s ongoing inquiry into competition in the financial system is examining the broking space, he said.

Bailey expressed confidence that Commissioner Hayne will recognise the vast amount of data already collected by ASIC in their review of mortgage brokers.

“The ASIC report recognised the important role that mortgage brokers can play in promoting good consumer outcomes and strong competition in the home loan market and we are confident any other examination of our sector would find the same.”

He called upon the Royal Commission and the industry as a whole to focus on how competition can be further improved, including the impact of the government’s guarantee to the banks.

“Ultimately, the findings of this inquiry should assist the government to promote a competitive and stable financial industry that contributes to Australia’s productivity.”

The broking sector is a vital component to ultimately deliver this goal, he said.

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COMMENTS

  • by Country Broker 20/12/2017 9:18:11 AM

    Totally agree , the one thing the industry bodies need to take to the Royal Commission is the current behaviour of the banks in the totally one way and indiscriminate "claw back " policies of the lenders which historically was led by the CBA . Claw backs are necessary t stop "churn" but at present they are indiscriminate and totally one sided , eg what happens if a borrower dies ( it does happen) , or a client walks into a bank branch ( CBA and ANZ in particular) and they are upsold on a totally unsuitable mortgage ( yes it does happen!) and the broker is clawed back ?
    It will be interesting to see if the industry bodies who represent the brokers look to address this behaviour.

  • by Old hat 20/12/2017 11:33:35 AM

    Country broker - they won’t do that. The industry bodies and aggregators are owned by the banks (or in their back pockets). There is nothing in it for them to stand up for us.