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.
In a first for the mortgage industry, the Australian Bankers' Association (ABA), the Mortgage and Finance Association of Australia (MFAA), the Finance Brokers Association of Australia (FBAA) and the Customer Owned Banking Association (COBA) held a discussion forum with key industry participants including bank and non-bank lenders, aggregators and brokers to progress reform.
The forum, held on Friday 9 June in Sydney, was recognised by participants as an opportunity for the industry to understand the key issues in response to ASIC's proposals for mortgage broking; the potential impact to aggregators and lenders; and the overlap with the Sedgwick Review.
ABA Executive Director – Retail Policy Diane Tate said, "This first meeting of the forum was an important step for the industry to work together on options for an industry based response to calls for changes in the mortgage industry.
"We have heard these calls to change incentives and governance arrangements and we look forward to working with the industry, in consultation with the government and subject to all competition law obligations, on reforms to support good customer outcomes."
MFAA CEO Mike Felton said, "The MFAA sees this as a crucial step in the process of determining how we as an industry respond to the challenges of addressing ASIC's proposals on broker remuneration and how we ensure the sustainability of our industry going forward.
"This meeting demonstrates that our industry is serious about self-regulation and has the maturity to work together across different stakeholder groups to effect the required change and ensure customer outcomes continue to remain front of mind."
Peter White, Executive Director of the FBAA, said, "This is a unique step forward for our industry to see everyone sit around this table with a clear view to support best practice and good consumer outcomes from this process, whilst supporting an industry sector that has positively delivered so many positive outcomes to the lending landscape over the past 27 years."
COBA Chief Executive Mark Degotardi said, "Brokers are a valued part of the mortgage market. We're keen to work with industry to ensure that this channel continues to work effectively for consumers."
Further discussions with forum participants will be held in the coming months, with all participants committing to work in consultation with Treasury and Government stakeholders on an industry led response.