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The FBAA has called on the prudential regulator to put aside its bias against brokers.
FBAA chief executive officer Peter White expressed dismay at recent comments made by APRA chairman Wayne Byres that broker-originated loans tend to have a materially higher default rate compared to loans originated through proprietary channels.
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“It is obvious that whichever group writes the most business will always have the highest number of defaults as it’s simply a matter of volume, and not the lack of quality transactions,” he said.
“We want the regulator to separately review bank branch-originated loans and look at their issues, and then compare it, using the same analysis, [to] broker-originated loans, and then draw conclusions. Anything else is not comparable nor is it a fair assessment of any potential issues.”
Mr White said he will work with APRA and lenders to ensure the channel is managed appropriately for the benefit of customers, banks, brokers and the Australian financial system.
“If the regulator starts pointing the finger at brokers, it has to be said there are three more fingers pointing back at the banks,” he said.
The FBAA says it will continue to collate further data supporting the professionalism and market value of brokers, and has called on APRA to undertake similar processes and investigations of the banks’ lending practices.
The FBAA’s comments come after the MFAA formally requested that Mr Byres fully disclose the data that has led to his opinion that broker-originated loans are “higher risk”.
