Second MFAA/ FBAA/ ABA/ COBA forum sets a timeline for proposing new remuneration structure to ASIC
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Second MFAA/ FBAA/ ABA/ COBA forum sets a timeline for proposing new remuneration structure to ASIC
A second meeting of the ‘mortgage industry forum’ yesterday agreed to develop and present a new structure for commissions to ASIC and the Treasury by the end of 2017.
Held in Sydney, the forum involved the MFAA, FBAA, Australian Bankers Association, Consumer Owned Banking Association and a new participant, the Australian Finance Industry Association. Brokers also took part, with Connective being deputy chair for the day.
In addition to setting a date for proposals, the forum discussed draft terms of reference for the process, began the design of a cross-industry working group structure and started to develop an engagement and reporting plan.
MFAA CEO Mike Felton was positive about the forum: “These forums demonstrate the progress we are making together as an industry. Now is the time to maintain momentum and work together.” FBAA CEO was also supportive, whilst insisting the process must “ensure that the broker value proposition to borrowers and the Australian lending landscape is reinforced if not strengthened by this process, and not diminished.”
Will they listen to consumer advocates?
The second industry forum dealt with criticisms last week by CHOICE and others that consumers have not been represented in the forum.
Diane Tate, ABA executive director of retail policy, said that next step of the forum was to strengthen partnerships with consumer groups. The ABA had previously told MPA that consulting consumers was “not in response to the submission: it was always our intention of the forum.”
Should consumer advocates be fully included in the forum, brokers would have cause for concern. In their submission to the Treasury, CHOICE and others argued that trail commission should be scrapped, with upfront replaced by fixed fees and commission levels decoupled from loan size. They also called for the NCCP to be reformed to go beyond a ‘not unsuitable’ requirement of brokers.
However, according to ABA boss Tate “the industry will stay focused on ensuring that how mortgage brokers are paid, and the way this is structured delivers good outcomes for customers.”
AFIA joins the forum
The forum now has five official participants, with the new entrant being the Australian Finance Industry Association (AFIA).
Previously known as the Australian Finance Conference, which was founded in 1958, the AFIA represents a diverse range of finance companies: prominent members include the four major banks; Genworth; Equifax (previously VEDA), Pepper and Bank of Queensland.
AFIA CEO Helen Gordon said, “AFIA looks forward to contributing to the forum’s proactive engagement with the Government, and working with all participants on solutions to effectively address identified key risk areas in a way that protects customers while continuing to give them choice on how they access mortgage lending.”
Read more about industry negotiations over commissions:
- Banks commit to negotiating commission changes
- Self-regulation of commissions ‘not good enough’ says CHOICE
- Commission changes to be decided by industry, not ASIC
- ASIC remuneration review consultation closes today
