ASIC Review collaboration

Representatives from the mortgage industry have begun a process to ensure that incentives and governance arrangements are aligned with good outcomes for customers, in response to ASIC's report on mortgage broker remuneration.

In a first for the mortgage industry, the Australian Bankers' Association (ABA), the Mortgage andFinance Association of Australia (MFAA), the Finance Brokers Association of Australia (FBAA) and the Customer Owned Banking Association (COBA) held a discussion forum with key industry participants including bank and non-bank lenders, aggregators and brokers to progress reform.

The forum, held on Friday 9 June in Sydney, was recognised by participants as an opportunity for the industry to understand the key issues in response to ASIC's proposals for mortgage broking; the potential impact to aggregators and lenders; and the overlap with the Sedgwick Review.

ABA Executive Director - Retail Policy Diane Tate said, "This first meeting of the forum was an important step for the industry to work together on options for an industry based response to calls for changes in the mortgage industry.

"We have heard these calls to change incentives and governance arrangements and we look forward to working with the industry, in consultation with the government and subject to all competition law obligations, on reforms to support good customer outcomes."

MFAA CEO Mike Felton said, "The MFAA sees this as a crucial step in the process of determining how we as an industry respond to the challenges of addressing ASIC's proposals on broker remuneration and how we ensure the sustainability of our industry going forward.

"This meeting demonstrates that our industry is serious about self-regulation and has the maturity to work together across different stakeholder groups to effect the required change and ensure customer outcomes continue to remain front of mind."

Peter White, Executive Director of the FBAA, said, "This is a unique step forward for our industry to see everyone sit around this table with a clear view to support best practice and good consumer outcomes from this process, whilst supporting an industry sector that has positively delivered so many positive outcomes to the lending landscape over the past 27 years."

COBA Chief Executive Mark Degotardi said, "Brokers are a valued part of the mortgage market. We're keen to work with industry to ensure that this channel continues to work effectively for consumers."

Further discussions with forum participants will be held in the coming months, with all participants committing to work in consultation with Treasury and Government stakeholders on an industry led response.

AFM: Maximum LVR for IO Loans

The maximum LVR for new loans with an Interest Only portion will be limited to 80% (excluding any capped Risk Fee or LMI). This includes variations to any existing loans.

The following should be noted:

  • Applies to all products - Prime and Specialist Lending
  • Applies to both Owner Occupied and Investment Loans
  • The LVR will be calculated on the base loan amount - i.e. any Risk Fee or LMI can still be capped above the 80% limit

Updated product specs that reflect this change and also updated rate sheet that reflects the Complete/Alliance change (no change to rates just removal of >80% IO rates).

/clients/vow/downloads/afm_secure_specialist_assist_full_doc.pdf

/clients/vow/downloads/afm_secure_specialist_clear_alt_doc.pdf

/clients/vow/downloads/afm_secure_specialist_clear.pdf

/clients/vow/downloads/afm_secure_specialist_plus_alt_doc.pdf

/clients/vow/downloads/afm_secure_specialist_plus.pdf

/clients/vow/downloads/afm_secure_option_alt_doc.pdf

/clients/vow/downloads/afm_rate_sheet_10.06.17.pdf

ING: CRS to apply from 1 July

You may have heard that Australia is one of many countries that has committed to new global standards relating to the automatic exchange of financial account information, these standards are known as Common Reporting Standards (CRS).

Effective from 1 July 2017, all Australian financial institutions will need to identify and report to the Australian Taxation Office (ATO) accounts held by customers who are foreign tax residents. Similarly, overseas financial institutions will identify their Australian tax resident customers and report via their local tax authorities to the ATO.

What does this mean for the loan application process?

From 1 July 2017, all financial institutions in Australia including ING DIRECT will need to comply with CRS and identify their customers' for tax purposes.

As such we will require all customers (Residential and Commercial loan customers) to complete a Foreign Tax Residency Self-Certification form, and may also ask for other supporting documentation. These forms will be available via Apply Online and the Introducer website in the coming weeks.

What does this mean for you?

From 1 July 2017, if the CRS information is not provided or is incomplete, ING DIRECT will contact you to outline the requirements. It is important to highlight that we will not be able to proceed to approval until we have received and reviewed this information.

What's next?

Over the next few weeks we will be providing you with more details on the new legal requirements and access to the Self-Certification forms. In the meantime, if you would like to learn more about the CRS, visit www.ato.gov.au/crs as the ATO has published guidance materials which may help answer any of your questions.

MetLife: Insurance Campaign

Vow partner MetLife has recently launched its refreshed brand, and as part of the refresh, it is running a campaign around the benefit of Insurance Inside Super. The campaign highlights the many cases where members have not been aware they had insurance and become ill or had an accident, discovered they had life insurance through their super and were able to claim and get the support they needed.

For many people - low income earners, those in high-risk jobs, and those with previous illnesses - it is their only form of protection. MetLife believes raising awareness about insurance inside superannuation is a socially responsible thing to do.

MetLife's global purpose is "To be the trusted partner to help me navigate my changing world", which is reflected in the tagline 'MetLife. Navigating life together'. In Australia, this purpose has been extended to the brand positioning 'We're for the protectors' Reflecting that MetLife are 'your partner through life, and together they can help you protect yourself and your loved ones'.

The YBR group is working with MetLife to introduce a retail solution for the network and clients - watch this space for more on this new offering.