Resimac supports ‘Don’t Kill Competition’ campaign

From

Scott McWilliam

Leading non-bank mortgage provider Resimac has confirmed its support of the nationwide ‘Don’t Kill Competition’ campaign launched by the Mortgage & Finance Association of Australia (MFAA) to oppose a proposed ban on all mortgage broker commissions paid by lenders to brokers. 

The final report from the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry, issued earlier this week, recommended the banning of all trailing commissions and that upfront fees be paid to mortgage brokers by customers. 

Resimac Chief Executive Scott McWilliam said that mortgage brokers are essential component of the ecosystem of the mortgage industry.

“Brokers provide consumers with access to loans from the big banks as well as smaller lenders without a branch network and accordingly stimulate competition within the lending market,” he said. “The health of the broking sector is vital in achieving the best outcomes for home loan borrowers.” 

The MFAA recently released data showing that 59.1% of home loans were introduced by mortgage brokers, but has warned that the broking sector is under threat as a result of the proposed changes.

Along with a number of other lenders including the major banks, aggregators and brokerages, Resimac contributed to the Combined Industry Forum (CIF) package released in December, proposing changes to remuneration be made in the interests of the customer.

“We support the six principles of the CIF package which includes a carefully managed up-front commission structure,” Mr McWilliam said.

“This approach achieves better customer outcomes and improved standards of conduct, while continuing to promote competition in the Australian mortgage market.”

Mr McWilliam said Royal Commission scrutiny had led to big banks having a greater focus on responsible lending which has resulted in tightening of lending policies. 

“This ‘Royal Commission effect’ has levelled the playing field by requiring big banks to operate to the more stringent standards already observed by non-banks and smaller mortgage lenders.

“However, the proposed changes threaten to reduce competition in the mortgage industry, penalising consumers who could end up paying more for mortgages.” 

McWilliam urges lawmakers to think carefully about the consequences of changes. “Anything that diminishes competition or reduces consumer access to a wide range of mortgage options would be detrimental to ordinary Australians,” he said.

Resimac has advised that it will be issuing a communication to its customers to draw attention to the matter, referring them to the MFAA-led petition

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