Just a week after the Government released their Roadmap to implementing the recommendations of the Royal Commission, it also released an exposure draft focusing on best interest duties and mortgage brokers’ remuneration.
Earlier this week, mortgage broker Dr Ding Yang lost his credit licence for providing false information in his compliance report. Yang’s licence was cancelled by the Australian Securities and Investments Commission (ASIC), who also cancelled his membership with Connective OSN.
In its official public release regarding the draft, the Government said, “In response to Recommendation 1.3, the Government agreed to reform mortgage broker remuneration. This will be done by 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.”
The Government added that there would be an assessment conducted of trail commissions that will take place in three years by the Australian Competition and Consumer Commission (ACCC) and the Council of Financial Regulators.