Member for Shortland Pat Conroy will hold a roundtable with mortgage brokers this week to explain Labor’s response to the Banking Royal Commission in regard to their industry.
Some Lake Macquarie brokers had contacted Mr Conroy concerned that Commissioner Hayne’s recommendation that their fees be paid by home buyers instead of lenders would harm their industry.
“Labor’s approach will achieve the objectives of the recommendation, but in a way that does not harm competition in the mortgage market,” Mr Conroy said.
“Labor has listened to the valid concerns of mortgage brokers and come up with a solution that solves the problem without threatening their industry."
Labor has listened to the valid concerns of mortgage brokers and come up with a solution.- Pat Conroy
Labor would deal with the Royal Commission’s key concerns with mortgage broker remuneration, namely conflicted remuneration and incentives from banks to brokers that drive higher loans that may not be in the home buyer’s best interests, Mr Conroy said.
Labor would also impose a fixed percentage upfront fee for brokers that would eliminate the conflict of interest from different lenders offering different commission rates, the MP said.
Labor would also abolish trail commissions from lenders to mortgage brokers and aggregators on new loans from July 2020 as well as ban volume-based commissions and ‘soft dollar’ payments being offered to brokers by lenders.
Labor would implement the remaining 75 recommendations of the Banking Royal Commission in full, he said.