Slanging match between industry bodies hots up

November - Boxing. Two

By Jill Fraser for Lending Central

The FBA’s national president, Peter White says the AIPB is acting in “a cowboy fashion” and that its correspondence style is “flawed and unprofessional”.

The AIPB’s Maria Rigoni retorts with “I cannot accept responsibility for Peter White’s interpretation of the English language”.

The argument is centred around the AIPB’s invitation to the FBAA, the MFAA and the ABA to participate in an open industry discussion about bank ethics, which the AIPB claims is adversely impacting finance brokers.

White told Lending Central that the FBAA will not participate in the public forum that the AIPB is proposing because it sits on very shaky legal ground.

The basis of White’s response is based on the fact that the AIPB letter did not name the FBAA members that it is accusing of engaging in practices that are “unfair and have no ethical, moral or best business practice basis”.

The AIPB letter, co-signed by CEO Maria Rigoni and National President Peter Flakus, infers but does not mention lenders. It levels its allegations at “a number of members of your organization”.

White told Lending Central that this led him to assume that the allegations were being directed at finance brokers.

He said: “We are a broker association not the Australian Banking Association. We have the odd lender but predominantly our members are finance brokers.

“My immediate assumption was, members equals brokers. From there I looked at how damning these allegations could be if this was taken outside our Code of Conduct and put into a public debate where we would all be held liable.

“Now I’m hearing that it’s all about lenders. But as far as I’m concerned that’s still an assumption. If that is the case the AIPB needs to revisit what it has written.”

Asked if he believes that the suggestion of an open industry discussion has merit White said it depends on the proposed structure.

“The way it was proposed in that letter, no,” he says.

“At the moment there is no structure to what they’re suggesting or how it’s meant to evolve. Our response would depend on any potential liability within the structure of the forum.”

White would not be drawn into a discussion based on the inference in the AIPB letter, that lenders are the subjects of the allegations, saying that his response was determined by the terminology in the letter.

Rigoni said that she is not interested in White trying to justify his response to the AIPB letter.

“I don’t want any more pedantic sidelining,” she says. “I want the industry to focus on what is happening to finance brokers and then try to resolve it.

“It’s time the finance broking profession was treated with respect and was fairly remunerated and given competent service.”

The MFAA has declined the AIPB’s invitation to participate in an open industry forum.

MFAA CEO Phil Naylor told Lending Central that the MFAA has already conducted a couple of industry forums and will continue to do.

The ABA has not responded to the AIPB’s letter and would not make any comment to Lending Central.

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  1. What’s so hard about all the 3 broker organizations getting together for a meaningful (hopefully) exercise…why turn it into a beaucratic standoff.

  2. Last week I received a renewal notice for FBAA – I declined. I hoped for more from them and in the end they are no more effective than the MFAA. I really hope that new regulation will mean we don’t need any memberships at all.

  3. What hope do we brokers have when the idustry bodies that are supposed to representing us cannot agree to sit together and discuss the issues affecting their members? They are happy to take our memberships subscriptions yet provide no real backup in terms of pressure on lenders to support members. The industry is going through a major shake up at the moment to increase the professionalism of members and we are the ones forced to pay the consequences both through reduced comms and now volume expectations. How about the industry bodies join forces with some meaningful dialogue regarding how they can improve the experience for members with the various lending institutions?

    Perhaps that makes too much sense, much the same as a single application form that covers all lenders. Thank goodness for aggregators developing software to e-lodge!

  4. The fact that there are 3 bodies in itself is a joke. FBAA and AIPB are a nuisance and should unite with the MFAA and make one body strong and relevent. The AIPB is a seriously flawed group of opportunists who have little or no relevence to the industry of today and is basically a self serving group of whingers. If they have so much to say that is relevent get behind the current established body and put their hand up for office whre they can seriously make a difference. The lenders are laughing their socks off as these desperate people strive for relevence by ‘inviting’ the other industry groups to join them in a forum that the lenders probably wouldn’t attend. They want the others to attend to give them relevence which they currently don’t have and probably never will. They are a forum for whingers and the industry has more than enough of them without making it official.

  5. My observation is the MFAA (by far the biggest body of the 3) offers next to no value at all for brokers. It has compromised its integrity with bank money and overpriced courses that it usually compels its brokers to undertake (or lobbies the banks and or government to compel us). By not being the voice of the broker I cannot see how anywhere near the current number of brokers will continue to pay annual fees to the MFAA once licencing is in place. I think many brokers will renew in 2010 but not in 2011. My suggestion to the MFAA – start representing brokers interest strongly. If there were no brokers the MFAA would not exist.

    AIPB is a very small player trying to find some ground. The noises it makes seem to suggest it is easily the most broker friendly of the 3 groups. MFAA & FBAA are attempting to ignore the small player (or throw in the occasional barb) in the hope that it goes away.

    The FBAA is stuck half way between the AIPB’s strong pro broker stance and the bloated MFAA’s cold indifference.

  6. To all my fellow brokers on the front line. Yes the front line because we are all canon fodder. The tacticians controling these association that shape our industry, and theorectically represent our best interests, are no longer us the brokers but the banks and aggregators. It is these bodies that now sit on the state and national councils of the MFAA and FBAA and push their objectives under the guise of our interests.

    Here in WA as of a month ago have an MFAA state council made up of 3 aggregators, 2 banks, a training organisation and only 2 brokers. That is 2 votes for our needs and 6 Votes for their landside decisions. If you look at each states representation then you quickly realise that the MFAA does not serve the needs and interests of brokers.

    The MFAA now wish to make it a condition of membership that every broker must have 10 lender acreditations under their belt but thate MFAA are not actively lobbying the lenders to abolish volume targets to make this possible. In some cases the smaller brokers or those looking at succession planning will be forced out of the industry because the banks still require you to be a member of the MFAA and the aggregators are also insisting on the MFAA or FBAA. Now if every broker woke up and realised we no longer have true representation and they did not renew their memberships, then there would be a lot of lender BDM’s and aggregator representatives sitting on councils without any purpose.

    Why is it CBA sits on state council looking out for the interests of the brokers when CBA may have been the first lender to start the de-accreditation process and culled so many brokers. Does everyone see the irony here.

  7. Just for the record neither I nor the AIPB are fighting with anyone.

    We are fighting for a reversal of some very unfair and unethical practices, past present and future.

    I would like Mike Smith, Ralph Norris, Gail Kelly and Cameron Clyde to personally explain to government, regulators, the Australian public and the finance broker community how they see clawback as a fair or ethical practice.

    Are they proud that their institutions behave in such a way? Do they consider it a misleading practice when they do not disclose to borrowers that their clawback policy can make a finance broker complete a lot of outsourced work for them and then not pay for the completion of that work?

    What would they do if their child was abused and bullied? Would they say oh that’s all right the bully has a contract that covers the abuse so it is ok.

    One could say that there are some in the industry who appear to be picking a fight with us and or flighting from us. In doing so they are deflecting, maybe purposefully, the conversation from the issues effecting brokers that we are seeking remedy for.

    It is time for brokers to make a statement about their own profession if they want one.

    Next year when licensing is required for some types of credit transactions the removal of the obligation to be a member of the MFAA or the FBAA for lender accreditation purposes is not on any agenda of proposed change I have seen.

    Brokers are required to be members of “lender approved” industry bodies for accreditation purposes not licensing purposes. Has anyone heard the MFAA or the FBAA say that they will be recommending to ASIC, their lender members and other lenders that licensing rather than membership of an industry body should be a requirement for accreditation?

    Does anyone see this may have an unwanted effect on their membership numbers?

    The MFAA state that they have roundtables with the influential people in the industry. The aggregators and lenders; these important people identify and solve the problems of the brokers.

    I contacted Phil Naylor as a broker member of the MFAA and stated that I would like to attend the round table in April. Is anyone surprised that my attendance or viewpoint were not welcome?

    I asked Phil Naylor for a list of the names of the people who attended the roundtable in April to solve broker issues and a copy of any minutes. The response given; “The names of people are not relevant – it is the organisations in this case that are the MFAA members. The only record of the forum is the one already distributed.”

    Well there you go I was put in my place as a broker member. The decision makers’ names and their organisations names are a secret from finance broker members, at least this one anyway.

    What else is going on behind the closed boardroom doors?

    Oh and lets not forget the flight to quality over quantity – recently a CBA branch staff member told me they are asked several times a day “Have you opened a “quality” account today?” Guess what quality is measured by a $500 value.


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