The Finance Brokers Association of Australia (FBAA) has welcomed news of increased scrutiny on the big banks and their behaviour when setting interest rates for mortgage products.
The Australian Financial Review reported on Wednesday that the Australian Customer and Consumer Commission (ACCC) had issued compulsory information notices to the big banks to gather information on how they set interest rates on their residential mortgage products.
The FBAA called for the review back in June and executive director Peter White is pleased that the ACCC has taken notice and decided to act.
“We applaud the ACCC for eventually doing its job in this regard, as we realised months ago there was a real possibility of the big banks passing the cost of the new bank levy on to its customers,” Mr White said.
Recent interest rate movement has seen some investor and interest only loans increase by as much as 66 basis points, some since the federal budget was handed down in May, but there has been little explanation as to why.
“Some of these rate increases are extraordinary and the Australian public deserves to know what’s going on,” Mr White said.
“The emphasis now is on the banks to justify their decisions to increase rates and maintain consumer trust in the bank sector.”