The Mortgage and Finance Association of Australia (MFAA) and a coalition of industry partners are urging Australians to write to their MPs in defence of mortgage brokers in a national campaign.
The industry association is launching a national advertising campaign as it retaliates to the recommendations in Hayne’s Royal Commission report.
CEO of the MFAA Mike Felton said the changes to remuneration, starting with the ban on trail commission in 2020, will have a “devastating effect” on the industry, kill competition and drive up the cost of borrowing.
He said consumers can feel rightly disappointed by the outcome of the Royal Commission, with recommendations affecting brokers giving power back to the big banks.
“The Royal Commission was set up to protect them from big bank power but has simply entrenched it further,” Felton said.
“How mortgage brokers can be front and centre of the recommendations is inexplicable to me. A massive new bank fee added to the cost of buying a home cannot be a good outcome for Australians.
“As reviews by ASIC, the ABA and the Productivity Commission have found, brokers drive competition by providing a shopfront for smaller lenders, particularly for rural and regional customers. We are critical to the health of Australia’s mortgage lending market.”
Recent data from the MFAA showed that broker market share was now at a record high of 59.1% and Felton said much of the growth in market share came from small and regional lenders who are now able to compete with the big four.
Felton added, “Brokers are critical to competition in home lending. As such, the MFAA is leading a campaign to call attention to this issue and help Australians understand that low interest rates, competition and the services they receive from brokers for just under six out of every ten new home loans are under threat.
“We have launched a national advertising campaign this week, and we are calling on everyday Australians to join us in a grassroots campaign to protect competition by letting their local representatives know they support the broker channel.”
Brokers can share this link with their customers, where they will be able to enter their postcode and contact their federal MP: www.brokerbehindyou.com.au