On Monday this week, High Court Justice and Royal Commissioner Kenneth Hayne handed down the report from the banking Royal Commission, which had 76 recommendations which will challenge key aspects of banking and financial services including superannuation and mortgage broking.
There has been much discussion during the Royal Commission, and since the report’s findings/recommendations have been revealed, both major political parties have indicated support for all recommendations.
The key recommendations around banking conduct are below:
• Require mortgage brokers to act in the best interests of the intending borrower, not the bank providing the loan. Breaching this law would result in a fine.
• Borrowers rather than lenders should pay the mortgage broker for their services.
• Lenders would be banned from paying trail commissions to mortgage brokers for new loans.
• Expand the Banking Executive Accountability Regime laws to track those responsible for any breach of lending laws.
During 68 days of hearings over the past 12 months, the royal commission heard from 130 witnesses and received more than 10,000 public submissions.
As far as the impact these changes will have on the property market, there has been mixed reactions from analysts, and time will reveal the significance. Lending is already tight, which is impacting on the amount people can borrow, or if they can borrow at all…so watch this space.