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Broking groups to appear before ASIC

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Charbel Kadib 3 minute read

Three broking groups have been called to appear before the corporate regulator in its second round of public hearings, designed to help shape its new responsible lending guidance.

In February, the Australian Securities and Investments Commission (ASIC) launched a review to update its responsible lending guidance (RG 209), which has been in place since 2010.

ASIC opened consultation by inviting submissions from stakeholders within the financial services sector and has since commenced a second round of consultation in the form of public hearings, in which stakeholders that provided submissions have been called to provide further guidance.  

ASIC’s first round of public hearings commenced in Sydney on 12 August, with several stakeholders, including the Commonwealth Bank of Australia (CBA), Westpac, BOQ and fintech lender Tic:Toc Home Loans among the participants.

The second round of hearings will commence today in Melbourne, with three mortgage broking groups invited to participate.

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Representatives from the Australian Finance Group (AFG), Connective and Mortgage Choice are set to expand on the submissions they provided to ASIC during the first round of consultation.

ASIC deputy chair Karen Chester and commissioner Sean Hughes probed Westpac general manager of home ownership Will Ranken about the quality of broker-originated loans in the first round of public hearings.

Mr Ranken noted that the bank’s verification requirements for loans originated via the proprietary channel are the same for those originated by brokers but acknowledged that broker-originated loans require an “extra layer of oversight and governance”.

However, the Westpac representative stated that the bank has not observed substantive differences in the quality and characteristics of home loans originated by the third-party channel.

Mr Ranken was then asked if Westpac would support a move by ASIC to prescribe different responsible lending obligations depending on how a loan is originated.

In response, Mr Ranken warned that ASIC should consider the effect of such changes on the value proposition of the broker channel, adding that he was “comfortable with the policies and procedures” that Westpac had in place for broker-originated loans.

Other representatives set to appear during ASIC’s second round of hearings include ANZ, NAB, LIXI, the Consumer Action Law Centre and the Australian Financial Complaints Authority.

The Adviser will be the home for the latest news and coverage from ASIC’s public hearings.

The regulator is expected to publish its new guidance before the end of the calendar year.

[Related: ‘No meaningful difference’ in quality of broker loans: Westpac]

Broking groups to appear before ASIC
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Charbel Kadib

Charbel Kadib

Charbel Kadib is a journalist on The Adviser and Mortgage Business.

Before joining Momentum Media in 2017, Charbel held roles with public relations agency Fifty Acres, and the Department of Communications and the Arts. 

Email Charbel on: This email address is being protected from spambots. You need JavaScript enabled to view it.

 

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