Mortgage broking regulation around the corner: FPA
Julie Berry
The Financial Planning Association (FPA) is keenly anticipating a national regulatory regime for mortgage broking, suggesting it may be only weeks away from public consultation following an “impatient wait” after lobbying for changes.
As it stands at the moment, Australia’s mortgage industry does not have a nationally unified regulatory system, with some members of the financial planning industry calling for it to be included under the Financial Services Reform (FSR) Act.
FPA manager of policy and government John Anning said the association had urged the Ministerial Council on Consumer Affairs (MCCA) to act on this and that to his understanding an advanced draft of the proposed new regime was nearing public release.
The MCCA consists of all Federal, State and Territory ministers responsible for fair trading, consumer protection laws and credit laws and has the role of developing a consistent approach to consumer affairs and fair trading matters of national significance.
“In our submission made to the MCCA last year, we focused on [the fact] that mortgage brokers should have stringent obligations similar in rigour to those faced by financial planners under FSR and the Corporations Act,” Anning said.
“Others may argue that you include mortgage broking under the Corporations Act, but we are not going that far — our position is that mortgage broking needs a strong national regime of licensing with strong obligations and how that’s achieved is up for discussion.
“It can be a state-by-state template regulation that’s the same or if the Commonwealth Government is referred the powers by the states, then that’s fine too. We don’t mind how it’s done, but we want a nationally consistent system.”
Anning said the submission was in response to growing concerns regarding the gap between the regulatory requirements of financial planning compared to mortgage broking, despite the impact of poor advice on consumers being similar in both sectors.
Berry Financial Services managing director Julie Berry believes the mortgage broking industry has some of the issues that were inherent to financial planning before a regulatory regime was imposed.
“If you go back to the way financial planning was, you could pretty much hang your hat out and be a financial planner, but this has become better for the consumer as it has become more regulated,” she explained.
“And just as financial planners want to be seen as professional, I think mortgage brokers probably do as well and regulation will only help that.”
The Mortgage Industry Association of Australia has confirmed it regards uniform regulation as vital for the protection of loan seekers and is co-operating with the MCCA in the development of its soon to be released draft legislation.
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