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The association has expressed its growing frustration over the lack of action taken to assist borrowers under financial pressure.
Although the Finance Brokers Association of Australia (FBAA) has welcomed the decision by the Reserve Bank of Australia (RBA) to hold the cash rate at 4.1 per cent during the August monetary policy meeting, FBAA managing director Peter White AM said that borrowers are still under mounting hardship.
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Mr White stated a two-month hold “isn’t a silver bullet” and that recent research from the FBAA has highlighted the “enormous financial and metal health pressure” on both borrowers and renters.
“We have outlined practical and tangible steps that can help borrowers and ease some pressure, but so far, we’ve seen no movement,” Mr White said
“These proposed steps won’t magically solve the problem but they will give borrowers a fairer go and ensure banks don’t take advantage of those in a vulnerable position.”
Mr White outlined the steps that should be taken to help borrowers, which included a further three months pause on interest rates for the “true impact” to be evaluated as well as banks should be forced to disclose introductory/new borrower rate and the current existing borrower rate.
“There must be a government inquiry into bank practices around the issue of disclosure, to protect borrowers and vulnerable markets,” he said.
Additionally, Mr White has urged the Australian Prudential Regulation Authority to reassess its decision to continue with the current 3 per cent loan serviceability buffer for mortgages and reduce the rate to 1.5–2 per cent that is “more appropriate in today’s economic environment”.
Mr White further stated these measures are “a pathway forward”, but action from lenders, regulators, and the government are required.
A visit from the Minister for Finance
Last week, federal Minister for Finance Katy Gallagher visited the FBAA offices to discuss policy that impacts the industry.
Mr White said the meeting provided the platform to discuss policy that affects the industry and enabled Ms Gallagher to increase her understanding of the important work undertaken by finance and mortgage brokers.
Mr White said at the time: “While I speak regularly with senior ministers in my role, this was a wonderful opportunity for our entire executive team to be able to both hear from her and provide input on issues that are important to brokers across Australia.”
[RELATED: Minister for Finance visits FBAA]
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