Combined Industry Forum Reports to Government on Broker Remuneration: Strong Package of Reforms to Address Key ASIC Proposals
11 December 2017
The Combined Industry Forum (CIF) has reported on a significant package of reforms as the mortgage broking industry works on solutions to issues raised in the Australian Securities & Investment Commission’s (ASIC) Review of Mortgage Broker Remuneration and the Australian Bankers’ Association (ABA) Retail Banking Remuneration Review (Sedgwick Review). Read more.
The CIF’s report to government is available here.
Industry comes together to promote broker industry benefits
16 November 2017
Industry associations and leading aggregator groups have joined forces to conduct research that supports the positive impact that the broker channel delivers for consumers. The industry is undergoing change in response to a series of government reviews, including the Financial System Inquiry and the ASIC Review of mortgage broker remuneration. Whilst the ASIC Review recognises the important role mortgage brokers play in the mortgage market, there is a need for a strong evidence base to fully understand the contribution of the industry to the economy.
Read the full press release here.
MFAA Response to the Senate Standing Committee’s Inquiry into Treasury Laws Amendment Bill
28 September 2017
Following earlier submissions regarding the Australian financial system External Dispute Resolution (EDR) framework, the MFAA lodged a submission to the Senate Standing Committee’s Inquiry into Treasury Laws Amendment (Putting Consumers First—Establishment of the Australian Financial Complaints Authority) Bill 2017 (AFCA Bill). The Bill proposes the establishment of a single EDR scheme, the Australian Financial Complaints Authority.
The MFAA had previously expressed that the current two EDR schemes offered its members choice and potentially constrained the schemes’ capacity to increase charges due to that competitive tension. In the MFAA’s view, the only effective EDR system is one which has the support of its members. EDR reform which is not supported by scheme members, or is forced upon them, will only lead to the degradation of successful mediation principles.
Should the Parliament pass the AFCA Bill, the MFAA continues to remain willing to work with the Government to try and ensure that the benefits provided by a multi-scheme environment are not lost through the mandating of a single scheme.
Read the full submission here.
MFAA responds to UBS claims of mortgage misrepresentation
12 September 2017
The MFAA questions the way UBS has represented the results of its recent consumer survey, given they do not reflect ASIC’s data. We particularly question UBS’ comparison of misrepresentation in the “Banker vs broker” channels, given that the actual data show us that default rates experienced on loans originated through the two channels are quite similar, once controlled for demographic differences.
Read the full statement here.
Mortgage industry progress on ASIC proposals
5 September 2017
The MFAA and other representatives of the mortgage industry are making strong progress developing the industry’s response to ASIC’s report on mortgage broker remuneration.
Read the full statement here.
MFAA defends role of mortgage brokers
12 July 2017
The MFAA was disappointed by the ill-informed comments from consumer advocacy groups that were reported in the media recently in regard to the ASIC Review of Mortgage Broker Remuneration. The MFAA believes the changes they proposed to broker commission models would be detrimental to consumers’ interests.
MFAA CEO Mike Felton said the proposals posed by the joint submission of consumer advocates would significantly harm the interests of consumers they claim to represent. The proposals raised by consumer advocates do not reflect the concerns raised by ASIC.
Read the full press release here.
Review of Mortgage Broker remuneration
30 June 2017
Following extensive member and industry consultation with brokers and broker groups, aggregators and lenders, the MFAA lodged a comprehensive submission to The Treasury addressing six proposals raised by ASIC in its Report.
Read the full press release here.
Review into EDR and Complaints Framework (Scheme of Last Resort)
28 June 2017
The MFAA lodged a submission about unpaid determinations made by External Dispute Resolution (Ombudsman) schemes and how the relevant complainants could be paid. The majority of unpaid determinations have been made against financial services businesses that have failed, been wound up, have liquidated, etc. Complaints against finance brokers form a very small proportion of those lodged with EDR schemes. This submission relates to this fact and that any ‘Scheme of Last Resort’ should be funded proportionally based on the level of business sector failure to pay those complainants.
Mortgage industry comes together to progress ASIC proposals
14 June 2017
Representatives from the mortgage industry have begun a process to ensure that incentives and governance arrangements are aligned with good outcomes for customers, in response to ASIC’s report on mortgage broker remuneration.
Click here to read the joint statement the MFAA worked on in coordination with the Australian Bankers' Association (ABA), the Finance Brokers Association of Australia (FBAA) and the Customer Owned Banking Association (COBA).
ASIC Supervisory Cost-recovery Levy
26 May 2017
Following its 19 January 2017 submission (see below), the MFAA lodged a follow-up submission in relation to industry funding of ASIC brought about following the Financial System Inquiry. Because the government had decided to have industry fund ASIC’s supervisory capabilities, the objective of the submission was to minimise the impact any levy had on the continuing viability of finance broking in the Australian market.
Final Ramsay Report undermines the fabric of EDR
24 May 2017
Joint statement by:
- Mortgage and Finance Association of Australia (MFAA)
- Customer Owned Banking Association (COBA)
- Australian Collectors & Debt Buyers Association (ACDBA)
- Association of Securities and Derivatives Advisers of Australia (ASDAA)
- Australian Timeshare and Holiday Ownership Council (ATHOC)
- Association of Independently Owned Financial Professionals (AIOFP)
The above peak industry associations reject a key recommendation of the Final Report into Australia’s three financial sector ombudsman schemes. The report, prepared by a panel led by Professor Ian Ramsay, recommended a single ombudsman scheme to replace FOS, CIO and the Superannuation Complaints Tribunal (SCT). Read the report here.
Financial Services Panel
23 May 2017
In response to ASIC’s Consultation Paper 281, the MFAA made a submission supporting the view that if ASIC establishes a Panel to review an individual’s conduct, senior and experienced MFAA members should be involved in any decision involving a finance broker. The MFAA is concerned that a fundamental objective of such a Panel is that appropriate outcomes occur for both industry participants and the consumers involved.
MFAA welcomes ASIC Remuneration Review
16 March 2017
Exposure Draft of the ASIC Supervisory Cost Recovery Levy Bill 2017 and related Bills
10 March 2017
Further to its January submission on the subject, the MFAA lodged a response to Treasury in relation to draft legislation on industry funding of ASIC’s operations. The response specifically sought clarification on broker business models and the potential for multiple licence fees; effective duplicated fees for those who operate through a company; and how transitional arrangements would apply.
Retail Remuneration Review Issues Paper (Sedgwick Report)
10 February 2017
The January 2017 ‘Sedgwick’ report focused on the direct channel but included a number of recommendations to generally align direct channel remuneration processes with those of finance brokers. The MFAA responded that the current remuneration practices in place to remunerate finance brokers were fit for purpose that the remuneration and regulation of ‘referrers and introducers’ needs to be entirely overhauled.
MFAA's response to the Ramsay Review’s Interim Report
27 January 2017
The Ramsay Review's Interim Report included a principle recommendation that the two existing operations of the Credit and Investments Ombudsman (CIO) and Financial Ombudsman Service (FOS) be amalgamated into a single scheme to reduce consumer confusion due mainly to its concerns about overlapping jurisdictions . To read the MFAA's response to the Ramsay Review’s Interim Report on the External Dispute Resolution (EDR) and Complaints Framework, click here.
The MFAA submission addresses each of the objectives in the review's recommendations and it can be accessed here.
MFAA lodges submission on ASIC Industry Funding Proposal
13 January 2017
The MFAA has lodged a submission on Treasury’s proposal for industry to fund the activities of the Australian Securities & Investments Commission (ASIC) in relation to the credit and credit intermediary sectors. To read the full press release and submission, click here for more information.
Review of the Financial System External Dispute Resolution Framework
7 October 2016
The MFAA made a submission to Treasury’s Review Panel on the current services provided by the CIO and FOS. The submission in short, suggested that in our view, the current scheme arrangements meet consumer and industry needs effectively and efficiently in reviewing and considering complaints against mortgage and finance brokers in relation to disputes about both consumer credit and unregulated credit.
Submission to ACCC on FBAA application for authorisation of Disciplinary Rules
29 September 2016
The MFAA lodged a submission with the ACCC following an application by the FBAA to establish Disciplinary Rules. The MFA generally supported the proposal but raised some concerns about the potential for bias and conflict of interest in the proposed model.