MFAA slams APRA’s broker comments

“This does not mean third-party channels have lower underwriting standards, but simply that the new business that flows through these channels appears to be of higher risk, and must be managed with appropriate care,” he said.

MFAA chief executive Siobhan Hayden has called on Mr Byres to share the data that has led to his opinion, as the association is yet to see any information that supports his view.

“In fact, I advocate that the broker channel delivers a higher standard of compliance and assessment than the propriety channel, and some major lenders have confirmed my view,” she said.

“Secondly, loans are made by lenders based on the information provided by customers either through third-party introduction or their own direct source. We believe that because brokers are arguably required to jump through more regulatory hoops, some of APRA’s conclusions may not have any basis in fact.”

The MFAA said it has formally requested consultation with the APRA chairman and full disclosure of the reference documents so that the association can respond to the findings and communicate the outcome with the industry.

“Whilst APRA also acknowledges that finance brokers provide the positive benefits of healthy competition in the sector – a claim supported by the recent Ernst & Young report commissioned by the MFAA earlier this year – these latest negative claims are yet to be backed by publicly available data,” it said in a statement.

[Related: Brokers on notice following ASIC lending probe]