The MFAA has issued an update on its work with the Australian Banking Association (ABA) to address the risks posed to mortgage brokers through the updated banking code, implemented last week.
The MFAA advised caution upon first learning that lenders were requiring mortgage brokers to assist them in meeting their new obligations, and said that it would seek clarity on the new declarations being introduced, and their legal ramifications for those in the industry.
On Friday, CEO Mike Felton updated MFAA members on the “strong headway” the two associations have made in addressing the concerns of the broking industry.
Felton explained, “The MFAA and ABA are working closely on the development of a training module as a matter of emergency – in order to ensure that [brokers] are equipped to meet customer needs in this area, but also that [they] are comfortable in doing so.”
“Obviously, lenders will differ in the exact way they implement their obligations under the code, but the idea is to get the same core training to avoid [brokers] having to duplicate that over multiple lenders.”
The CEO also spoke to the fear that brokers’ professional indemnity (PI) insurance would not cover the new financial abuse declarations banks are asking brokers to sign.
“The initial PI concerns are steadily being addressed,” said Felton, “A number of insurers have assured that broker requirements under the banking code of practice are not to be excluded from policies.”
For now, Felton encouraged brokers who are unsure of how to proceed to follow the guidance of their aggregator.
“Whilst we have not fully resolved the situation, I am delighted to say that we are making strong headway with excellent progress in a number of areas,” he said.
“The MFAA and the ABA have been in active discussion over the past week, and we are close to finalising the wording of a broker statement around co-borrowers and financial abuse.”