How the Banking Royal Commission may impact Mortgage Brokers
What we have learnt from past Royal Commissions is the Chief Commissioner can investigate wider elements from their core focus, for example, banks third-party relationships. Already, Malcolm Turnbull is urged to include the Superannuation industry in the Chief Commissioners enquiries.
Fringe services and relationships in the banking industry, like Mortgage Broking, will most certainly be looked at, this may include commissions, aggregation models and new technology platforms. However, considering ASICs recent attention to the Mortgage Broking industry coupled with limited time and restrictive Term of Reference protocol placed upon the Chief Commissioner, it is up for question on how much time is devoted to this line of enquiry.
The Chief Commissioner scrutiny will most certainly fall on the following areas:
- Anti Money Laundering
- Lending & legal recovery practices (in particular towards the rural community)
- Fees, including third-party commissions
Some attention may fall on integrity testing Mortgage Broker’s behaviour wherever there is a Broker touchpoint in the above areas of focus. However, with the introduction of the NCCP, the Broker industries general compliance, ASIC monitoring of the industry, and the recent ASIC investigation and report to Hon. Kelly O’Dwyer on Broker commissions, it’s likely the Chief Commissioner will consider the Broker industry a low priority.
Without a doubt, the Anti Money Laundering practices and Superannuation will be some of the main area’s in the Chief Commissioners enquiries and bare the brunt of his/her Judgements.
Laurence Hugo is a Negotiator with Credit Mediation Service Pty Ltd, with 25 years of banking experience, he specialises in debt mediation.