AFG today welcomed the certainty provided for the mortgage broking sector by the Australian Government’s Royal Commission Implementation Roadmap.
In setting out details for the way forward for the financial services sector post-Royal Commission, the Government confirmed significant work undertaken to put customers first had mortgage brokers well positioned.
The draft National Consumer Credit Protection Amendment (Mortgage Brokers) Bill 2019 released by Treasury requires mortgage brokers to act in the best interests of consumers when providing credit assistance. These changes reflect commitments endorsed and introduced across the industry earlier this year.
AFG CEO David Bailey said: “We are confident the Government understands the need to maintain a competitive lending market and we look forward to engaging with policymakers to ensure the development of legislation is considered.
“Industry has already moved on defining ‘good customer outcomes’, and we see the formalisation of a ‘best interests’ duty as an extension of the work that is underway. We have always maintained that it is in a broker’s best interests to ensure the customer’s needs are placed first and foremost, without that focus a broker would not have a sustainable business.
The Bill and regulations also make changes to mortgage broker remuneration by requiring the value of upfront commissions to be linked to the amount drawn down by borrowers instead of the loan amount; banning campaign and volume-based commissions and payments; and capping soft dollar benefits.
“Industry is well advanced on implementing these changes after a comprehensive industry-led process that started over two years ago.
“We look forward to working with the government on the detail of the draft Bill to ensure the effective force mortgage brokers deliver to competition, choice and lower borrowing costs is maintained,” Mr Bailey said.