The Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry, also known as the Banking Royal Commission and Hayne Royal Commission was tasked with reporting on the misconduct within the banking, superannuation and financial services sector.
The final report issued by Justice Hayne was publically released on 4 February 2019 unveiled 76 recommendations and 24 referrals for potentially criminal conduct.
In response to some of the recommendations, the Government has released a draft National Consumer Credit Protection Amendment (Mortgage Brokers) Bill 2019 and related Regulations.
The documents are available for public comment until 4 October 2019 and are scheduled to be introduced on 1 July 2020.
The key aspects of the draft Bill include:
- A requirement for mortgage brokers to act in the best interests of consumers when providing credit assistance;
- Changes to mortgage broker remuneration, requiring the value of upfront commissions to be linked to the amount drawn down by borrowers instead of the loan amount;
- Banning campaign and volume-based commissions and payments; and
- Capping soft dollar benefits.
In addition, the draft Regulations limit the clawback commissions payable to brokers to two years and prohibit the cost of clawbacks being passed on to consumers.
For more information on the draft Bill, visit: https://www.treasury.gov.au/consultation/c2019-403520