The MFAA has recently been granted interim authorisation to enforce its Code of Practice as it awaits “final authorisation” of its amended Disciplinary Rules from the ACCC, post-royal commission.
The Australian Competition and Consumer Commission (ACCC), Australia’s competition regulator, has granted interim authorisation to the Mortgage & Finance Association of Australia (MFAA) to allow the association to enforce its current Disciplinary Rules while considering additional changes to its Code of Practice (along with other aspects of its governance regime), to align with the recommendations of the banking royal commission’s final report.
The MFAA amended its application for interim authorisation on 31 March 2019 after lodging its application for re-authorisation on 20 December 2018.
The body has reportedly sought authorisation for “10 years for its Revised Rules”, which include “exclusionary provisions to expel members”.
The disciplinary rules also include rules for the MFAA Tribunal.
The ACCC has announced that it is entitled to review its decision to grant interim authorisation to the MFAA at any time and interim authorisation should not be taken as an “indication of whether or not final authorisation will be granted”.
According to the ACCC, granting the MFAA interim authorisation “removes any risk” that the body’s disciplinary rules may breach the “competition provisions” of the Competition and Consumer Act.
The ACCC said the MFAA’s disciplinary rules outline processes for investigation of “complaints, expulsion of members and appeals against refused applications” for membership or accreditation.
MFAA members includes lenders, aggregators, brokers and related professions, including lawyers and accountants.
The ACCC will recommence its assessment of the application after the MFAA has amended its governance regime and provided the ACCC with additional information, including its updated disciplinary rules and code of practice.
The MFAA proposed that it could take “three to six months for its governance regime to be amended” to align with the royal commission’s recommendations.
ACCC commissioner Roger Featherston said: “The MFAA has requested more time to consider and make changes to its governance regime following the financial services royal commission.”
He continued: “Once the MFAA has made these changes, a process that we understand will take three to six months, we will assess the new disciplinary rules and decide whether to authorise them.”
According to the ACCC, authorisation provides protection from legal action for conduct that may breach the competition provisions of the act.
Further, the ACCC may grant authorisation if it is “satisfied that the benefit to the public from the conduct outweighs any public detriment”, which includes a “lessening of competition”.
The ACCC has said it will open up the MFAA’s changes to its governance regime to consultation and will publish a draft determination before making a final determination in light of the consultation submissions.
The ACCC invited submissions from “interested parties” such as major banks in Australia, relevant industry associations, consumer groups, state governments, the federal government and other regulatory bodies of relevance.
This public consultation process is reportedly intended to assist the ACCC in determining whether a “proposed arrangement” will result in a “net public benefit”.