New policy effective from October 1
Commonwealth Bank has made a significant change to how clawback is applied in cases where new lending is refinanced within a two-year period.
Effective October 1, the bank has confirmed that it had updated its policy on clawback of broker commissions.
In response to questions from MPA, a CBA spokesperson confirmed that changes had been made following feedback from brokers and aggregator partners.
Effective on all new applications submitted on and from October 1, 2023, the first year clawback will remain unchanged, with brokers “continuing to earn 50% of the upfront commission after one year”, the CBA spokesperson said.
“The remaining 50% we will pay out over the second year, with a monthly gradual straight-line approach which will see the clawback percentage continue to reduce every month until month 24,” the spokesperson said.
Following concerns that cashbacks were affecting broker incomes and could create undesirable outcomes for borrowers, CBA announced in May that it would remove its cashback offer, effective June 1.
CBA was the first bank to remove cashbacks, which was followed by a number of other lenders, including NAB, Bankwest and Westpac.
“Combined with the removal of refinance cashback payments for customers, these changes should help brokers and customers focus on the long term benefits of the home loan they are searching for,” the CBA spokesperson said.
The bank said that it would continue to offer a wide range of flexible home loans with competitive rates, encouraging any customer looking for a home loan to suit their unique needs to speak with their broker.
