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From fraudulent brokers to broker accreditation and arrangements, mortgage brokers will be in the spotlight at the royal commission’s first public hearings in March, along with fraudulent loan applications.
The commission announced yesterday that its first round of hearings will focus on aspects of banking and financial services providers’ treatment of consumers in connection with credit products -- including residential mortgages, car finance, and credit cards.
It will hold its first round of hearings from 13 to 23 March 2018.
For residential mortgages, the commission will hear the case of NAB’s Introducer Program and fraudulent loan applications.
NAB’s Introducer Program had previously been mentioned in a home loan fraud court case when a former NAB mobile banker was charged last year with falsifying home loan documents and attempting to defraud the bank.
Banker Andrew Matthews was accused of getting dozens of customers to sign documents falsifying they had been referred to NAB through its Introducer Program between 2012 and 2016.
As Australian Broker reported in November, NAB held an extensive review of its mortgage book and identified around 2,300 home loans that might have been submitted without accurate customer information and/or documentation, or correct information in relation to its Introducer Program.
As a result of the review, it terminated 20 bankers in NSW and Victoria, and penalised additional 32 bankers, including reducing their remuneration.
The bank started a remediation program last year for some of its customers, and said then that it had engaged with ASIC to ensure the remediation program provided fair outcomes for customers.
CBA’s credit insurance in connection with home loans, personal loans and credit cards will also be grilled at the hearings.
ANZ will be grilled again in relation to its former car finance business Esanda, a few weeks after a Federal Court judge fined it $5m for car loans approved by Esanda from three finance brokers. As Australian Broker reported last month, ANZ admitted 24 contraventions of the responsible lending provisions for these car loans and agreed to pay a $5m fine as part of the settlement.
The commission said a number of consumers will give evidence of their particular experiences, and that a representative of a consumer advocacy group will also provide evidence.
Consumer groups Choice and Consumer Action Law Centre have both made public submissions to the commission.
The commission said it will inform the entities that are the subject of consumer evidence, but reports say the major banks have already been told to prepare for cross-examination.
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