Mortgage and finance body able to discipline members engaging in misconduct

Posted by LC Team, Thursday, May 28, 2009

The Mortgage and Finance Association of Australia has been granted conditional authorisation to enable it to continue to give effect to its Disciplinary Rules, ACCC Chairman, Mr Graeme Samuel, said today.

The MFAA has approximately 13,000 members Australia wide including mortgage brokers, finance brokers, mortgage managers, lenders (bank and non-bank) and originators, lawyers, accountants and educational institutions associated with the industry.

Authorisation provides immunity from court action for conduct that might otherwise raise concerns under the competition provisions of the Trade Practices Act 1974. Broadly, the ACCC can grant an authorisation when it is satisfied that the public benefit from the conduct outweighs any public detriment.

The rules allow the MFAA to enforce the professional standard of conduct set out in its Code of Practice and Constitution to ensure that its members are compliant.

“The ACCC considers that the rules, which provide for the investigation of complaints against members and the imposition of a range of sanctions by the MFAA Tribunal, result in a public benefit. These Rules are important as they operate as a significant deterrent against MFAA members acting inappropriately.”

The ACCC has granted authorisation subject to a condition that the MFAA delete a rule which allows the MFAA’s board to impose sanctions on a member regardless of any other action being taken by the MFAA Tribunal or at law. The ACCC considers this rule undermines the role of the MFAA Tribunal.

ACCC Media Release

Tags: Disciplinary Rules, MFAA

Filed Under: MFAA

9 Comments

Tony May 28, 2009

Oh good! The MFAA will still be able to discipline those rogue aggregators who have introduced inexplicable Administration Fees.

Phil May 28, 2009

Who cares…. new regulation will make them even more irrelevant than they already are.

Ben November 5, 2009

what does the MFAA do anyway. They allow brokers to write loans for lenders they are not accredited with, ignore complaints made about brokers offering loans whithout a certificate in finance brokering and turn a blind eye to brokers claiming they offer products from a range of lenders even though they are not trained or accredited with all of their panel.I am confused Exactly what do they do to look after the integrity of the industry.
Maybe some one could post and let us all know.

Phil November 5, 2009

Actually they do nothing about the integrity of the Industry. However the points you raise are not really an issue. Brokers generally dont write loans for lenders they are not accredited with, as they wont get paid if they are not. MFAA has just dumped any broker that doesn’t have a certificate in finance brokering. However the consumer couldnt care less as they dont know who the MFAA is anyway. And that’s just the issue, consumer awareness. After regulation it wont matter anyway.

Ben November 5, 2009

what about the brokers that use other brokers accrediation details to submit loans. is that not an issue either ? The MFAA certianly dont seem to care.

Phil November 5, 2009

MFAA would not know of that practice. Its not uncommon for a broker to take a deal to another broker that specializes in a particular product or client circumstance. Lenders change their products on a daily basis.

However the new broker is also acting under the guidelines of that particular lender. Both brokers are now responsible to the client. Doesn’t matter if the initial one has passed the deal on or not. Therefore the new broker should take on the deal as if its his own client ( ie client interview etc ) I have several brokers that submit deals to me, but I basically treat them as a lead. Its my PI cover that is at stake. My experience is the client is only too happy to be looked after. They have two brokers working for them at no cost.

The real issue is brokers passing themselves off as Lenders and charging loan application fees for themselves and then the Lender charges a fee. Loan offers stipulating that fees are payable regardless of the loan actually settling. There are many negatives with regulation that are not being addressed, but stopping this would be a positive.

Kevin November 5, 2009

What about clients being asked to sign an agreement that they will pay the broker a set fee if the loan is approved and the client does not settle the loan?

Ben November 5, 2009

I can understand passing the loan on to a more experienced broker and them following through with the interview etc. That sounds like smart business especially if it is complex.
shame more arent like you then:)
sounds to me like you would not hand out your accreditition ID for others to use, so of course it would not be an issue and if the MFAA doesn’t consider it an issue in misconduct the I suppose I shouldnt either.