The Banking Royal Commission has been like a thriller with us glued to our screens as we see banking executive after banking executive humiliated by the industry’s activities.
But while we have been transfixed with a CEO and Chairman resigning and companies threatened with criminal actions, away from centre-stage, lenders have been modifying their practices to meet the recommendations of recent government reviews.
Accredited Broker stands by its previous comments that practices in the mortgage broking sector are essentially sound, but that there is always room for improvement.
But someone doing the right thing (which is predominantly the case for brokers) does not make the headlines.
Many commentators seem to believe that, just because they have seen the US movie The Big Short about the GFC, they understand Australian lending practices.
This week, the Australian Prudential Regulation Authority (APRA) told lenders it expects to see restrictions on loan to income restrictions being applied. This will go some way towards ensuring lenders meet their Responsible Lending obligations.
Indeed, this is Accredited Broker’s main argument – most brokers have just been doing what they have been told to do by the lenders and regulators and want to do the right thing by the client. Change the playing field and brokers will comply.
Evidence of how things are changing came from two lenders, Bankwest and NAB. Both reaffirmed commitments to brokers – and paying them upfront and trailing commissions. They did, however, emphasise the need to modify practices outlined in a recent ASIC review.
It is to be hoped that the Royal Commission appreciates that with or without headlights, the broking industry continually evolves to help Australia’s borrowers.