Amidst a swathe of decisions to tighten responsible lending, brokers have expressed alarm at the rapid nature of these reforms.
A survey conducted by MyState Bank collected results from more than 200 brokers and found the number one concern for over 50% of respondents was the speed at which regulators have changed aspects such as loan to valuation ratios (LVRs) and loan availability to quash heated housing markets in Sydney and Melbourne.
An additional 25% of brokers flagged the potential for further regulatory changes with limited notice as their primary concern, while 8% said the ability of their broking businesses to deal with these changes at short notice was more worrisome.
Regulatory action overshadowed housing market concerns with only 9.5% of brokers saying the potential for a significant slowdown was their main fear.
These responses show that brokers believe that regulators are not giving adequate notice or consultation around regulatory changes, said MyState group executive broker distribution Huw Bough
“Mortgage brokers are a key mortgage distribution channel in Australia. Broker networks give consumers greater choice and encourage competition by enabling smaller challenger banks to offer products in markets right across the country,” he said.
“As an integral part of our financial system, it is important that the broker industry’s views are fully considered and taken into account in any industry change.”
In the survey, which was carried out through the bank’s national broker network, more than 60% of those polled said regulators failed to consider the wishes of consumers when making recent changes.
There also seems to be a move away from the big four banks with 46% of respondent brokers saying a greater number of clients are now looking for a mortgage elsewhere.
As a smaller bank, MyState is strategically reliant on the broker channel and is not conflicted on where it wants to compete, Bough told Australian Broker
“This enables us to have a healthy and deeper dialogue with brokers, act as a real business partner, and really focus on improving the broker customer experience. Because we succeed if our brokers succeed, our interests are aligned around helping brokers in a range of areas and doing what is best for the customer.”
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