The head of the Finance Brokers Association of Australia (FBAA) has described cross table discussions with the Assistant Federal Treasurer about concerns relating to unjust commission clawbacks in the broking industry as fruitful.
Backing up his promise made at the annual FBAA National Conference at the Gold Coast, chief executive officer Peter White spent Monday morning with the Assistant Treasurer Kelly O’Dwyer discussing the lack of fairness of commission clawbacks which continues to drive a wedge between brokers and lenders.
“You can call me the proverbial dog with a bone on this issue but I will not let it rest. I outlined the FBAA’s concerns to Minister O’Dwyer about the unfairness of ‘non-contract-breach’ clawbacks and discussed ways to resolve the inequity of broker clawbacks.
Mr White stressed brokers suffer the consequences of being in an industry in which it can two months for a loan to be settled, only to have your up-front commission clawed back due to circumstances outside of your control.
“It is unjust and unreasonable that a person who is self-employed could wind up having to suffer financial hardships after having commissions taken off them 12 months later.”
The FBAA CEO also discussed lenders mortgage insurance (LMI) disclosure and the potential negative effects it has on borrowers who don’t know the full risk and obligations of LMI, plus the need to ensure this doesn’t have future implications.
“This could be very embarrassing for governments with so many borrowers completely unaware of the hidden terms and conditions that effect their loan. The Minister’s office is going to review my historic submissions and data on this issue and we are hopeful of a positive outcome soon on this potentially nasty issue.”
Mr White also welcomed ASIC’s probe into the remuneration process in the broking sector and is confident ongoing discussions with the Minister and industry regulators will help all parties find the best outcomes.