Powered by MOMENTUM MEDIA
the adviser logo
Broker

Suncorp highlights broker utility in Treasury submission

by Charbel Kadib5 minute read
Suncorp

The non-major bank has lodged a submission to Treasury as part of the consultation process for the proposed best interests duty, in which it has stressed its support for the “critical” broker channel.

The deadline for submissions in response to the Morrison government’s National Consumer Credit Protection Amendment (Mortgage Brokers) Bill 2019 has now passed.

The draft bill contains a new bests interests duty obligation on mortgage brokers, as recommended by commissioner Kenneth Hayne in the final report of the banking royal commission.  As an extension to the best interests duty, the bill builds on remuneration reforms proposed by the Combined Industry Forum.

The proposal also includes a provision to limit the period over which commissions can be clawed back to two years and prohibits the cost of clawbacks being passed on to consumers

Advertisement
Advertisement

In a statement to The Adviser, Sucnrop Bank has revealed that it has used the opportunity to lodge a submission to highlight the utility of the broker channel.

“Suncorp believes a viable and ethical mortgage broker channel is critical in driving stronger banking competition in Australia and providing greater consumer choice,” the bank noted.

The bank joined broking industry stakeholders in welcoming the new best interests duty provision, adding that it would further strengthen the broker proposition.  

“We strongly support measures, such as a best interests duty, which provide continued customer confidence in mortgage brokers,” the bank added.

“[We] will continue to actively participate in discussions about how we can support a sustainable mortgage broker industry and deliver better outcomes for customers.”

Treasury is yet to publish the full cache of submissions. However, broking industry leaders have previously revealed that they would use the opportunity to lobby for reform to current remuneration arrangements.

Connective director Mark Haron noted the impact of contrasting remuneration policies adopted by the lenders off the back of the CIF’s move to limit the upfront commission paid to brokers to the amount drawn down by borrowers (net of offset).

Mr Haron said that some lenders had opted to withhold the payment of commission for additional funds arranged by a broker, which are utilised by a borrower after a pre-determined period post-settlement.

The Connective director added that the disparity in the application of the CIF reforms had increased risks of “lender choice conflicts”, which could hinder compliance with the newly proposed best interests duty.

Loan Market executive chairman Sam White also noted his concerns with existing net of offset arrangements.  

Mr White called for an arrangement that better aligns with existing clawback provisions, which, under the federal government’s newly proposed bill, would limit the clawback period to two years.

The provisions of the bill are scheduled for implementation by 1 July 2020.

[Related: Final call: Best interests duty submissions due today]

suncorp

Charbel Kadib

Charbel Kadib

AUTHOR

Charbel Kadib is the news editor on The Adviser and Mortgage Business.

JOIN THE DISCUSSION

You need to be a member to post comments. Register for free today

MORE FROM THE ADVISER

Stephen Hale ta

MFAA launches near-prime, specialist loan resource

Coined Finance for when your customer doesn’t fit the mould: A broker’s guide to near-prime and...

READ MORE
Daniel Newell Gedda

Specialist lender LoanU rebrands to Gedda

The personal and auto loan provider LoanU, which specialises in helping Australians with impaired credit histories...

READ MORE
tech tools

CBA introduces AI technology to combat scams

New figures released by the competition watchdog this week have revealed that Australians lost more than $2 billion...

READ MORE
magazine
Read the latest issue of The Adviser magazine!
The Adviser is the number one magazine for Australia's finance and mortgage brokers. The publications delivers news, analysis, business intelligence, sales and marketing strategies, research and key target reports to an audience of professional mortgage and finance brokers
Read more