The MFAA is going into bat for brokers on Open Banking

by Mike Wood04 Aug 2021

Mike Felton, CEO of the Mortgage and Finance Association of Australia (MFAA), has released a video explaining how the peak body for mortgage brokers is going into bat for the industry on Open Banking and Consumer Data Rights (CDR).

In a wide-ranging video message, Felton explained everything that the peak body has done in the area, including lobbying parliament and government, as well as ensuring that brokers had full representation in what has been described as a ‘python squeeze’ of new regulations.

“Open Banking is the first implementation of CDR, and it’s all about customers using their data to access and benefit from it,” explained Felton. “It formalises the data that you have been getting to date and it’s really important that our industry is included, so that we don’t have a competitive disadvantage going forward.”

“Until now, all the rules that had been put out did not suit our industry and had significant data security requirements that would be too onerous to meet. This is an area in which the MFAA has been exceptionally active in for over three years, and we’ve put in more than 10 submissions to various parties including ACCC and Treasury."

Brokers are likely to now be classified as a specialist group that can work with clients under the new regulations.

“Finally this year, there was acknowledgement from Treasury of the importance of including brokers systemically. As an industry, we are 60% market share and you want that component in the system so that it doesn’t detract from the benefit of CDR.”

“The likely approach was going to be to allow consumers to elect to send their data outside of CDR to a broker under encryption as a regulated, trusted advisor.”

“On 30 April, Treasury made their intent clear to change the rules to accommodate consumers’ trusted advisors, particularly mortgage brokers, and on 1 July, they published the latest rules that goes some way to implementing that.”

“We don’t think it is perfect yet, but we look forward to working with Treasury to get it right. At the moment, a consumer can be invited by an accredited person to share their data with a trusted advisor, but we want to it to be that a consumer can instruct a lender to share their data with a broker, because that would be the most logical way to give that consumer control.”