Mortgage industry moves forward on ASIC proposals

Sydney, 20 July 2017: Representatives from the mortgage industry have agreed the framework to develop an industry response to ASIC’s report on mortgage broker remuneration.

The second meeting of the mortgage industry forum¹, held on Tuesday 18 July in Sydney, discussed a draft terms of reference for the process, began the design of a cross-industry working group structure, and started to develop an engagement and reporting plan to ensure the forum works closely with all stakeholders.

The Australian Bankers’ Association Executive Director – Retail Policy, Diane Tate, said that the next important step for the forum will be to strengthen partnership with consumer groups, ASIC and the Federal Government.

“We want to ensure their views are heard and reflected in the industry response,” she said.

“The industry will stay focused on ensuring that how mortgage brokers are paid, and the way this is structured, delivers good outcomes for customers.”

Mortgage and Finance Association of Australia CEO Mike Felton said, “These forums demonstrate the progress we are making together as an industry. Now is the time to maintain momentum and work together to ensure we achieve a balance between strong competition across the industry and good consumer outcomes.

“It is important that the process is broadly consultative and we will soon have cross-industry working groups in place, focused on creating improved quality measures and solutions for the issues raised by ASIC.”

Peter White, Executive Director of the Finance Brokers Association of Australia, said, “Ensuring we as an industry achieve positive beneficial consumer outcomes is extremely important. At the same time we must also ensure that the broker value proposition to borrowers and the Australian lending landscape is reinforced if not strengthened by this process, and not diminished.”

Customer Owned Banking Association Director – Policy, Luke Lawler said, “COBA supports an industry led approach to responding to ASIC’s proposals and this forum is making progress on a framework that will help ensure that brokers can continue to deliver for consumers and competition.”

Australian Finance Industry Association CEO Helen Gordon said, “AFIA looks forward to contributing to the forum’s proactive engagement with the Government, and working with all participants on solutions to effectively address identified key risk areas in a way that protects customers while continuing to give them choice on how they access mortgage lending.”

The forum will meet monthly to develop responses to the ASIC proposals and Sedgwick² recommendations for third parties, and will formally present its progress to ASIC, Treasury and the industry by the end of the year.

Information on the first forum held on 9 June can be found here.

ENDS

Contact: Stephanie Arena 0477 470 677 or Nic Frankham 0435 963 913

¹ The mortgage industry forum consists of representatives from bank and non-bank lenders, aggregators and brokers, the Australian Bankers’ Association (ABA), the Mortgage and Finance Association of Australia (MFAA), the Finance Brokers Association of Australia (FBAA), the Customer Owned Banking Association (COBA) and the Australian Finance Industry Association (AFIA).

² An independent review of remuneration in retail banking was conducted by Stephen Sedgwick. More information is available at retailbankingremreview.com.au