Australia’s mortgage broking industry has criticised the Banking Royal Commission report, saying a move to overhaul how brokers are paid will make loans more expensive by entrenching the power of major lenders.
The Finance Brokers Association of Australia says the Royal Commission had fundamentally failed to understand the role mortgage brokers play and the competitiveness they bring to the home loan market.
The sector, which accounts for 60% of all home loans, is gearing up to fight a key recommendation in the final report from Kenneth Hayne: that borrowers, not lenders, should pay brokers.
“Hayne wants to hand even more power to the big banks and eliminate competition, which is a ridiculous scenario and shows just how out of touch he is when it comes to brokers,” Finance Brokers Association managing director Peter White says.
“We know that most borrowers wouldn’t pay and banks would make more money and standards would drop further.”