New powers given to Australia’s competition watchdog may go beyond simply asking banks to explain rate rises and may be extended into the mortgage broking sector.
Rod Sims, chairman of the Australian Competition and Consumer Commission (ACCC), has indicated that the regulator’s broad information gathering powers could be widened to include the second tier banks and mortgage brokers.
“Eventually we could look at a range of things, but for this first year, if we judge that the broker market needed to be looked at we could do that,” he told
Guardian Australia.
“We haven’t formed that view yet. We’re just really focused on getting information from the five banks.”
While the ACCC would not comment further on this when contacted by
Australian Broker, a spokesperson did say that a new Financial Sector Competition Unit was being built to look into specific competition issues across the industry.
The unit’s first task will be to commence a one-year price inquiry into residential mortgage products up until 30 June 2018, they said.
“As part of this inquiry, the ACCC can compel the major banks to explain any changes or proposed changes to fees, charges, or interest rates in relation to residential mortgage products affected.”
As well as checking the veracity of the banks’ claims, the regulator would also inform the public about misleading representations, the spokesperson said.
A baseline for residential mortgage products will also be established with banks required to explain changes to fees, prices and charges over time.
“The ACCC will also provide customers with transparency as compulsory investigative information gathering powers will allow the ACCC to substantiate claims made by banks in relation to residential mortgages,” the spokesperson said. “Through that, the ACCC will be able to provide consumers with a better understanding of how the big banks make decisions on changes to their mortgage rates.”
This added transparency will have an “important effect” on bank behavior, they added.
With regards to the bank levy, further assessments will be conducted over the coming year in relation to any pass through of the proposed tax to help assess competitiveness within the banking sector.
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