AFG has today called for the customer to be first and foremost in the debate on mortgage brokers and the big banks.
AFG Chief Executive Officer David Bailey has urged a careful and considered approach to policy settings preserving the best possible competitive arrangements as big banks seek to consolidate lending back to their branches.
“We have seen testimony which has deliberately denigrated the mortgage broking sector and it is nakedly self serving,” he said. “Thousands of small business operators around the country are being bullied by the big end of town.
“The suggestion of a fee for service would have the effect of lessening competition, consolidating lending back to the major banks, driving up prices, and making it harder for first home buyers and other sectors of the market.
The only winners out of such a change will be the major banks with their extensive branch networks. “Despite consumers voting with their feet, recent public statements suggest some have seen an opportunity to take back that market share by demonising their biggest competitors who have driven a fairer go into the market.
“The white noise about mortgage brokers is a distraction from the fact that Australian consumers are choosing to have a relationship with a mortgage broker who knows their individual circumstances and understands the lenders, many of whom do not have a branch presence, that may be able to help them.
“AFG data shows our brokers are delivering 40% of business to the the non-major lenders. If mortgage brokers are taken out of the equation, the non-majors and any semblance or competition will be decimated.
“Moves to marginalize the broker channel would mean the loss of tens of thousands of jobs in small business across the country won’t be the only price paid,” he said. “Make no mistake, the losers will be every single mortgage holder in this country as the big banks once again have free rein to take back control.