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ISCOVER
Jessica Darnbrough
Treasurer Wayne Swan’s proposed banking reforms could have negative ramifications for brokers.
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Speaking to The Adviser, In Touch chief executive officer Paul Ryan said while it was hard to tell what impact any banking reforms would have on brokers until they are formally introduced, the government’s plan to slash mortgage exit fees could force lenders to recoup these costs elsewhere.
“If you take away somebody’s income, i.e the banks', where do they recoup those lost costs? They have shareholders. They may look to recoup their costs from mortgage brokers,” Mr Ryan said.
“Indeed if exit fees are removed, we could see commissions cut or clawbacks increased.”
Mr Ryan's fears come on the back of comments issued by the Australian Bankers Association chief executive Stephen Stephen Munchenberg just last month.
Mr Munchenberg said it if exit fees were removed, it is possible that some banks may try to recoup the costs in other ways.
"Like all businesses, banks do need to pass on their costs to customers, but whether the banks just absorb those costs off their profit line or whether they pass them on in some other way is down to the individual bank," he said.
