REP 19 A report to ASIC on the finance and mortgage broking industry
Released 26 March 2003
Prepared by the Consumer Credit Legal Centre NSW (Inc).
In August 2002, ASIC, following a recommendation by its Consumer Advisory Panel, commissioned the Consumer Credit Legal Centre (NSW) to produce a report examining the mortgage and finance broker industry. This decision was a response to ASIC taking over Commonwealth level responsibility for consumer protection in the credit marketplace, and the growing importance of mortgage brokers in that market. It was also a response to concerns expressed by community advocates and caseworkers who were experiencing a growing incidence of complaints involving brokers. These experiences led to these groups identifying the industry as lightly and unevenly unregulated, and as containing some high-risk players and unfair practices.
CCLC (NSW) was commissioned to produce a report that:
- analysed the broker industry, both structurally and through a broker survey;
- examined the way in which the broker industry is regulated, both locally and internationally;
- identified the range of problems being experienced by consumers, through case studies and a survey of caseworkers; and
- considered a range of regulatory responses that might address the problems identified from the experiences of consumers and caseworkers.
This report reflects the views of CCLC (NSW), and includes consideration of a number of options for reform. To the extent that these reforms involve legislative changes, it is acknowledged that these are not matters within the discretion of ASIC. However, these options are considered in the context of a continuing debate among industry associations, individual players, financial services commentators in the media and regulators about the nature and future direction of the broker industry. This debate predominantly occurs in the context of what form future regulation of the industry should take, and not whether there should be government intervention.