Comments on: When taxpayers underwrite ANZ Asia, it’s time to re-regulate

By: james mcdonald

james mcdonald — Thu, 10 Sep 2009 02:28:07 +0000

Adam - But if you did want to keep them as an option, withdrawing accreditation by the sound of it would be a showstopper. That’s anticompetitive and surely must be illegal. Standard practice right across Australian commerce of course — along with all the consumer brand names that cut off supply to any retail stores that discount their goods — but still illegal, if anyone cares.

Bernard - Just how influential do you think the Big Four have been in formulating the government’s crisis-response plan? I mean, they must be pretty happy with all this:

- deposit guarantee applied at first only to Australian banks, later extended to other institutions once the run on non-guaranteed deposits was over;

- government possibly pressuring the ACCC to a approve the Bankwest and St George takeovers;

- continued deliberate forcing up of housing demand (i.e. security for banks’ existing mortgages), as Wayne Swan made abundantly clear (http://www.crikey.com.au/2009/08/06/housing-is-overpriced-swan-is-making-it-so/)

Did I miss anything?

By: Adam Barker

Adam Barker — Wed, 09 Sep 2009 22:59:32 +0000

Thanks James - accreditation means I am authorised to advise on their loans, and can submit applications to them as I have completed training with them. Without accreditation, a broker cannot submit applications on client’s behalf to a lender.

The thing is they are doing this purely for market share, nothing else. I have not recommended this bank to clients for some time now, as they were a) taking up to 4 weeks to even start looking at an application and b) the service they were providing was disgraceful.

Because I have not recommended them for some time, I am now told I need to keep my stats up or get out. As far as I am concerned I will forget them, they are definitely nothing special.

I have also heard on the grapevine certain lenders are ‘fast tracking’ their own loans in house, while external broker’s loans wait until there is time to review them (hence the delays). This is another way they are making their own service more attractive to people, while destroying competition and independent advice.

By: jeebus

jeebus — Wed, 09 Sep 2009 22:49:28 +0000

Good article, Bernard. The big four are tempted to sow their wild oats into the charred ash of the global banking system, lured by the promise of money and power. They need to be restrained, because they are too big to fail, and as such are unable to objectively weigh the risk to taxpayers against the rewards for executives.

By: james mcdonald

james mcdonald — Wed, 09 Sep 2009 06:34:03 +0000

That’s really interesting Adam. As potential mortgage customer I’m not one bit amused to hear that.

What does “accreditation” mean? If loss of it is a substantial disadvantage to you, well … I’m no lawyer but doesn’t their behaviour breach something in the Trade Practices Act? Maybe worth a phone call to the ACCC to advise on that one.

By: Adam Barker

Adam Barker — Wed, 09 Sep 2009 04:01:53 +0000

Totally agreed. The level of competition is absolutely disgraceful at the moment and unfortunately I can’t see it getting any better. Not only do two banks have a stranglehold on nearly ALL financing done in Australia but they are trying to take it further.

Commbank and Westpac require mortgage brokers to submit a minimum number of loans within a specified perio,d or their accreditation is torn up. As a new mortgage broker I have just received a letter stating that it has been 3 months since accreditation with one of these banks and I have only submitted one loan with them. I have two weeks to submit two loans or I will lose accreditation.

This is totally unacceptable and removes impartiality for clients. How can they be certain when they are recommended Commbank or Westpac this is the best option for them and not in the interest of the broker? I ignored the letter and will let it lapse.

Not to mention the banks complaining about ‘funding costs’ and ‘margins’ and continually raising interest rates independent of the RBA, but at the same time, buying up other businesses using millions of dollars, not to mention the huge capital raisings they have undertaken. The list of takeovers by the big 4 during this period is as long as your arm and it will come at the detriment of the Australian public. Yes they have been strong during the GFC, but now it’s time to bring competition to the finance industry.