Head of the FBAA Peter White has questioned the banking association’s decision to appoint CBA CEO Matt Comyn as chair.
The Finance Brokers Association of Australia (FBAA) has lambasted the Australian Banking Association (ABA) for failing to appoint an "independent" chair to its board, instead opting for the head of the Commonwealth Bank (CBA).
The ABA appointed CBA CEO Matt Comyn to the role of chair after its quarterly Council of CEOs meeting in September. He will replace ANZ CEO Shayne Elliot, who has held the role since December 2017, succeeding former NAB CEO Andrew Thorburn.
FBAA managing director Peter White said he held concerns about commercial interests and personal bias held by the appointed chair against the broking sector.
Moreover, Mr White said it is time to overhaul the big four banks’ rotation system of the chair, particularly since the banking and financial services royal commission “exposed the dishonesty, gross breaches of trust and lack of transparency by the banks”.
“Remember, it was the CBA that was found to be covertly planning to remove broker commissions, then they threw brokers under the bus at the royal commission by promoting the Netherlands model without giving a full explanation of that model and the devastating impact it had on borrowers,” Mr White said.
Mr Comyn told the royal commission last year that he supported the Netherlands-style fee-for-service model, whereby consumers are charged a fee for mortgage advice.
Mr Comyn also said he believes the existing broker remuneration model is conflicted.
Mr White said CBA also pulled some of its products from the broking channel, yet still allowed borrowers to access the same product through their branches, while some banks are reportedly known to be using their branch networks to churn broker portfolios causing clawbacks to brokers.
“The banks themselves are under scrutiny in the backend of the royal commission. Therefore, when a body is trying to govern what the banks do and it is being led by people who are commercially constricted, it doesn’t play well when you’re trying to drive and share a board that governs the entire banking sector,” Mr White told The Adviser.
“Having some independence would certainly go a long way to ensuring there are no biased or commercial conflicts in the direction given through the chair.
“You need an independent set of eyes, and appointing an independent chair of the ABA is a step in the right direction if the banking industry wants to restore trust and confidence.”
Malavika Santhebennur is the features editor on the mortgages titles at Momentum Media.
Before joining the team in 2019, Malavika held roles with Money Management and Benchmark Media. She has been writing about financial services for the past six years.
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