The national peak body representing Australia’s finance brokers has backed comments by former ACCC chairman Allan Fels, labelling it disgraceful that banks are “ridiculously slow” to pass on mortgage rate reductions yet so quick to pass on increases.
Chief executive officer of the Finance Brokers Association of Australia (FBAA) Peter White says the current banking system is not fair.
“Here you have long term experts and researchers supporting the fact that cost of wholesale funds have come down and the banks have not passed that on to variable rate borrowers.
“It’s clear the objective of the banks is only to boost returns to shareholders. While we recognise the importance of shareholder returns and a strong profitable banking system, it also must be fair to consumers, and this is not.”
Mr White also said finance brokers play a vital role in achieving greater competition for consumers, something that has not been mentioned in media reports of Mr Fels’ comments.
“There is little point asking the bank for a better deal because banks are limited to their own products. A broker however, can offer a variety of rates ensuring that consumers are given greater choice.”
He explained that a broker is obligated by the National Consumer Credit Protection Act to offer consumers a needs analysis, resulting in the product offered taking individual circumstances into consideration.
He advised consumers to review their home loans with a finance broker, but recommended the broker is aligned with the national body.
“Using an FBAA member broker not only provides competitive choice, but offers a dispute resolution facility through the association, ensuring greater peace of mind for mortgage holders.”
The FBAA is the national peak body representing Australia’s finance brokers. www.fbaa.com.au.
About Peter White
Peter White has been in finance industry since 1979, was involved in set up of the first RAMS home loans sales office, was the first CEO of Wizard Home Loans and is a former Associate Director of AIDC Ltd Investment Bank. He has been the FBAA’s CEO for 5 years.