Home loan competition 'won't change under reforms'
Article by Mozo
The government's recently unveiled package of banking reforms will do little to change competition in the mortgage market, an industry expert has claimed.
Aussie Home Loans founder John Symond argued that the government's aim of creating a fifth pillar of banking through promotion of credit unions and building societies was unrealistic and showed that "they don't get it".
"I'm a fan of the mutuals. But to suggest that the mutuals can become the fifth force in banking quite frankly is a joke," he told a Senate inquiry in Sydney.
"They don't have infrastructure, they don't have technology, they don't have the clout and reach."
Mr Symond also suggested that the government's plan to abolish mortgage exit fees would not help many more people to compare home loans and switch as such fees would simply be replaced by other charges anyway.
That could include higher application fees or interest rates, he said.
Among the other measures announced by treasurer Wayne Swan this week were new funding options for smaller lenders and an inquiry into account number portability.
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