On the back of ANZ’s recent changes to its auto finance lending policies
, Peter White, executive director of the Finance Brokers Association of Australia
(FBAA) has called for further measures to be added, increasing transparency in the sector.
For a long time now, the motor industry has remained an uneven playing field when it comes to how commissions and remuneration is calculated, he told Australian Broker
“If you’ve got the same interest rate through the bank [or] the same interest rate through a caryard or a home loan broker, the home loan broker or the caryard says this is how much we earn. The bank doesn’t tell you.”
The issue is that banks don’t have the same disclosure obligations as finance brokers, he said.
“In the motor sector, they probably should identify if staff are getting commissions or move away from it.”
If banks and caryards have the same financial obligations, this will still ensure a competitive environment across the board, he said.
A good consumer outcome
White did throw his approval behind ANZ’s clarification that auto dealers can readily reduce interest rates along with commissions, saying that this was something the FBAA proposed a long time ago.
“We all know ASIC’s been doing the rejig on flex commissions and what ANZ is doing is a reflection of the outcome of that.”
ASIC’s original draft on flex commissions did not allow dealers to adjust rate in parallel with commission, an omission which the FBAA highlighted and convinced the regulator to amend, he said.
“It’s interesting to see that ANZ pointed that out,” he noted.
“From an industry point of view when people are doing the right thing, we need to acknowledge it and support it and put some framing around it because there’ll be plenty of cynics out there.”
ANZ changes asset finance commissions
Major lender unveils multiple lending changes
Auto finance firm fined $216k