Members of the mortgage broking and banking industries have agreed on the framework to develop an industry response to ASIC’s report on mortgage broker remuneration.
The mortgage industry forum, which is composed of the Australian Bankers’ Association (ABA), the Mortgage and Finance Association of Australia (MFAA), Finance Brokers Association of Australia (FBAA), the Customer Owned Banking Association (COBA) and the Australian Finance Industry Association (AFIA) - as well as unnamed "representatives from bank and non-bank lenders, aggregators and brokers" - met for its second meeting on Tuesday (18 July) in Sydney.
According to members of the forum, discussion revolved around: a draft term of reference for the industry response to ASIC's report on mortgage broker remuneration; the design of the cross-industry working group structure; and the development of an engagement and reporting plan to ensure the forum works closely with all stakeholders".
The forum, which first met last month, congregates on a monthly basis to develop responses to the ASIC proposals and Sedgwick recommendations for third parties, and will formally present its progress to ASIC, Treasury and the industry by the end of the year.
Speaking after the meeting, Peter White, executive director of the FBAA, said: “Ensuring we, as an industry, achieve positive beneficial consumer outcomes is extremely important. At the same time we must also ensure that the broker value proposition to borrowers and the Australian lending landscape is reinforced if not strengthened by this process, and not diminished.”
Likewise, MFAA CEO Mike Felton said that these forums "demonstrate the progress we are making together as an industry".
He added: "Now is the time to maintain momentum and work together to ensure we achieve a balance between strong competition across the industry and good consumer outcomes.
“It is important that the process is broadly consultative and we will soon have cross-industry working groups in place, focused on creating improved quality measures and solutions for the issues raised by ASIC.”
From the banking sector, the ABA's executive director, retail policy, Diane Tate, said that the next important step for the forum will be to strengthen partnership with consumer groups, ASIC and the Federal Government.
She said: "We want to ensure their views are heard and reflected in the industry response... The industry will stay focused on ensuring that how mortgage brokers are paid, and the way this is structured,delivers good outcomes for customers.”
Luke Lawler, the director of policy at COBA added that the association "supports an industry-led approach to responding to ASIC’s proposals and this forum is making progress on a framework that will help ensure that brokers can continue to deliver for consumers and competition.”
Speaking for the AFIA, CEO Helen Gordon concluded that the group “looks forward to contributing to the forum’s proactive engagement with the government, and working with all participants on solutions to effectively address identified key risk areas in a way that protects customers while continuing to give them choice on how they access mortgage lending.”
[Related: Banks and brokers in remuneration talks]