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Joint consumer submission – mortgage broker best interests duty and remuneration reforms

Submission to: Treasury
The broking industry needs wholesale reform if it is to act in the best interests of people taking out home loans. We support the imposition of a best interests duty, which should be expanded to all financial products, and the requirement to prioritise needs. There need to be stronger penalties for misconduct, the establishment of record keeping obligations and the loophole about the way a broker is defined needs to be closed. The root cause of so many problems in the mortgage broking industry is remuneration and wholesale reform is needed in this area: removing volume-based and campaign-based commissions, banning non-volume based bonuses, a prohibition on recommending excessive mortgages, ensuring that clawback arrangements encourage switching, defining conflicted remuneration, ensuring that IT software and support systems deliver fair results and ensuring that education and training events are genuine. These reforms would be pro-competitive so that brokers would be forced to scan the market and help people find a loan that best suits their needs. Although the prohibition of upfront and trail commissions are not within the scope of this proposed legislation, the consumer movement reiterates its support for these recommendations from the Financial Services Royal Commission.

Adequacy of Newstart and related payments and alternative mechanisms to determine the level of income support payments in Australia

Submission to: Senate Community Affairs References Committee
This is a joint submission from FCA and the State/Territory financial counselling associations. Fairness should be the underpinning principle in decisions about the level of income support payments. We support an urgent increase in Newstart by at least $75 per week to ensure people are more likely to be able to keep a roof over their heads and pay the household bills. We support an independent review of the adequacy of income support payments and the introduction of an independent body to set such payments to ensure they remain adequate into the future.

NCCP Amendment (Mandatory Comprehensive Credit Reporting) Bill

Submission to: Treasury
This joint consumer group submission responds to proposed legislation to include hardship flags in credit reports. We have long opposed this approach. The submission argues that proposed retention timeframes are too long, that hardship flags should only be visible to credit providers that are making responsible lending assessments and that hardship information should not be incorporated into credit scores.
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