I was surprised to see the CEO of the CBA state he wanted a flat fee for service for Mortgage Brokers. This is a clear example of offering up a Scape Goat. Nowhere in the Royal Commissions findings did it state this model was a good idea, in fact, the opposite. The Commission found that Mortgage Brokers offer an important service for consumers.
Real Estate agents receive a lot more in commission payments than Mortgage Brokers however no one is talking about reducing their commission and the reason why is simply because consumers pay Real Estate Agents commission and banks pay Mortgage Brokers commission. Cutting what brokers earn by two-thirds would save CBA $197 million, which is good for CBA’s shareholders. However, it would destroy competition, leaving millions of customers without access to credit outside of major lenders.
ASIC’s extensive, data-driven review of mortgage broker remuneration concluded that there was no finding of systemic harm caused by the broker channel.
Rather than looking at themselves and the clear facts uncovered by The Banking Royal Commission, banks are using the platform not to reform their behaviour, but to further reduce consumers access to quality information and options.
It’s absurd given the revelations of the past 12 months, that a major lender could be tasked with reforming Australia’s home lending market. All banking CEO’s should be made to address the findings of The Banking Royal Commission and not be given the opportunity to push a self-serving agenda.