The Treasury has lodged a submission with the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry.
The submission includes commentary on issues raised in relation to third party lending. Interestingly, Treasury stated that, in its view, “the quality of new mortgage lending is now better than it was prior to 2014. The introduction of comprehensive credit reporting and open banking reforms should also assist. This is an area where continued effective action by regulators, rather than a further tightening of legal obligations, would generally appear to be appropriate.”
Brokers are encouraged to take the time to read relevant sections of the report which includes commentary on the role of mortgage brokers, lending standards, the conflicts of interest facing industry participants, fees and commissions, and how lender sales staff are similarly affected.
“This submission demonstrates the value of the data driven, well informed and well considered ASIC Broker Remuneration review that was conducted over 2016 and 2017 and the benefit of the mortgage broking industry uniting in an unprecedented manner through the Combined Industry Forum (CIF) to respond to that report,” said MFAA CEO Mike Felton.
“By establishing the CIF in June last year, we as an industry, have been able to use the collective knowledge and experience of an entire industry to develop a set of proposed reforms which were presented to ASIC, Treasury and the Government late last year and which are currently being implemented. The CIF process considered the unintended consequences of various solutions before putting forward a package of reforms that allowed our industry to ’get ahead of the curve’ in the reform process. This has given far greater credibility to our proposals than if we had only commenced the process in response to the Royal Commission this year.
“The Treasury submission strongly supports self-regulation and recognises the vital role that brokers play ‘in facilitating effective competition and better outcomes for consumers’. The submission demonstrates a strong understanding of the mortgage broking industry and welcomes the CIF proposals as positive developments ‘which could address the most significant misconduct with the current remuneration model’.
“Overall this is a very positive report for the mortgage broking industry,” he added.
Read The Treasury submission here.