Royal Commission terms may exclude brokers

by Miklos Bolza12 Dec 2017
Despite recent media speculation that the upcoming Royal Commission will delve into mortgage brokers, the draft terms of reference hint that this is unlikely, said one industry association head.

When asked about the viability of claims made in mainstream and trade media, Peter White, executive director of the Finance Brokers Association of Australia (FBAA), expressed doubt saying that the commission could not compromise or duplicate another investigation, inquiry, or criminal/civil proceeding.

“For me … the ASIC rem review is off the table because it’s already been investigated. You’d be duplicating an inquiry or investigation that the regulator has already undertaken,” he told Australian Broker.

There is no basis for any media claims made that brokers will be included in the Royal Commission, he said.

“It always amazes me. They’re looking for something that doesn’t exist or they’re trying to find something because they want to find it and not because there’s any reality behind what they’re doing.”

With the Combined Industry Forum (CIF) already making reforms within the broking industry, White said that in the event the Royal Commission does examine brokers, it won’t find anything more.

One area that the Royal Commission may target is channels of distribution for lending. However, he said that there was no cause for concern.

“I don’t think there’s anything for brokers to worry about.”

Mike Felton, CEO of the Mortgage & Finance Association of Australia (MFAA), had a slightly different view, expressing the inevitability of broking being examined by a Royal Commission.

However, ASIC’s rem review and the Sedgwick report had already laid much of the groundwork, he told Australian Broker.

“Neither of these found systemic poor outcomes or systemic harm to consumers which we believe will stand us in good stead, regardless of the direction the Royal Commission takes.”

Likewise, the Commission would not impact the work currently being done through the CIF, Felton said.

“It is business as usual as we respond to the ASIC recommendations. [We] are already implementing reforms to further improve consumer outcomes and the strength of our industry.”

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