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The ACCC says Aussie’s franchise network of approximately 750 brokers have access to a ‘range’ of lenders’ mortgage products, and receive the benefit of Aussie’s brand recognition as well as administrative and technical support services.
ACCC chairman, Rod Sims, says these brokers may supply white label products, financed by a third party lender such as CBA, but rebranded as own-brand home loan products of Aussie Home Loans.
"In reaching its view, the ACCC took into account the competitive constraint arising from the presence of a number of alternative suppliers of home loan products and mortgage distribution services.”
While Aussie franchisee brokers will still wish to offer home loans from a range of lenders, CBA is likely to have the ability and incentive to increase the volume of, for example, white label home loan products supplied through the Aussie network – and this doesn’t sit well with Heritage Bank CEO, John Minz.
#pb# Minz says the decision perpetuates the confusion caused by the big banks’ multi-branding strategy –which he describes as setting up or acquiring smaller brands that then give the impression of being independent.
“This strategy is creating a false impression among customers that there is a high level of competition in the marketplace, but in reality a number of these so-called competitors are actually part of the big banks themselves.”
However, the ACCC concluded that this would not give rise to a ‘substantial’ lessening of competition, arguing that Aussie brokers make up just 6% of Australia’s mortgage brokers and that ‘there are many other distribution channels through which lenders can access brokers and borrowers’.
In reaching its decision, the ACCC says it consulted with a range of interested parties, including bank and non-bank lenders, mortgage aggregators, broker head groups and industry bodies.
Aussie declined to comment on the decision, saying simply that it’s ‘business as usual’ at the aggregator. A representative of CBA says the major bank is ‘pleased’ with the outcome, but refused to comment on any potential conflict of interests, saying the bank ‘[doesn’t] want to get in a debate over this’.
