MFAA suspensions ‘hammer home’ need for new legislation

Phil Naylor

The Mortgage and Finance Association of Australia’s (MFAA’s) recent suspension of two of its members for misconduct highlights the need for legislation that better protects consumers from “shonky operators”, according to the association’s chief executive Phil Naylor.

Nicole Orchard, Michael Steele and the latter’s employer, SITI Group, were found by the MFAA Tribunal to be in breach of the association’s code of practice; Orchard for advising a loan applicant to prepare an incorrect statutory declaration as evidence of a non-refundable gift of funds and Steele and SITI Group for unreasonably refusing to respond to requests from the Credit Ombudsmen (COSL).

Orchard has been suspended from MFAA membership for three months and Steele and SITI Group’s suspension will last until they respond satisfactorily to COSL. All can be reinstated if and when they comply with the tribunal’s requests.

“At our National Convention last week, Senator Nick Sherry spoke of the need for nationally consistent regulation to weed out what he calls ‘shonky operators’,” Naylor said.

“We wholeheartedly support the Government’s moves towards legislation that better protects consumers and the industry from the fringe-dwellers who choose to do the wrong thing.”

Naylor said that until such legislation is implemented, the best thing consumers can do to protect themselves is to avoid brokers who are not MFAA members.

Speaking at the convention, Sherry confirmed that transfer of regulatory power in the credit industry from states and territories to the Commonwealth would be complete by the end of the year and that the new system would be implemented in 2009.