Big banks squeeze home loan brokers
The independence of home loan brokers may be threatened by new demands from Australia’s biggest banks, consumer advocates have warned.
According to the Australian, Commonwealth and Westpac have both sent out letters to home loan brokers warning that they may be landed with reaccreditation fees if they fail to close on a certain number of home loan deals provided by the banks.
Consumer advocates have denounced the move, with Refund Home Loans executive chairman Wayne Ormond warning that it may reduce competition and jeopardise independence.
He claimed: "It would be valid for consumers to ask: if a broker is recommending a CBA loan, is that the best loan, or is it being recommended so the broker won’t lose his accreditation?"
There has been an invigorated debate over the dominance of the Big Four in the retail banking sector in recent months, with some critics warning that smaller lenders are being squeezed out of the market.
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