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BFCSA investigates fraud involving lenders, spruikers and financial planners worldwide.  Full Doc, Low Doc, No Doc loans, Lines of Credit and Buffer loans appear to be normal profit making financial products, however, these loans are set to implode within seven years.  For the past two decades, Ms Brailey, President of BFCSA (Inc), has been a tireless campaigner, championing the cause of older and low income people around the Globe who have fallen victim to banking and finance scams.  She has found that people of all ages are being targeted by Bankers offering faulty lending products. BFCSA warn that anyone who has signed up for one of these financial products, is in grave danger of losing their home.

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BFCSA: ACCC to deliver mortgage pricing inquiry report next week

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ACCC to deliver mortgage pricing inquiry report next week

Sydney Morning Herald 9 March 2018 — 12:15am

Clancy Yeates

 

The competition watchdog is preparing to release a key report into home loan interest rates next week, when banks will also face their first round of public scrutiny from the royal commission.

Among the many inquiries into banks, the Australian Competition and Consumer Commission has since last May's budget been conducting a powerful review of mortgage interest rate decisions, which have been publicly attacked by politicians in recent years.

The review is likely to touch on long-running debates surrounding banks' mortgage pricing, including the veracity of the industry's explanations for moving interest rates.

ACCC chairman Rod Sims confirmed that the the interim review, which has probed the banks' confidential information, was likely to be released next week. He would not discuss the report's findings but said it promised to be a "very interesting" read.

“It will be ready to go out next week, and I’ve got no reason to think that it won’t,” Mr Sims said.

Analysts have predicted the report could further dampen the banks' "pricing power" in the $1.6 trillion mortgage market, which is a crucial driver of the industry's profits.

When Treasurer Scott Morrison commissioned the review last year, he asked the ACCC to look at the pricing behaviour of banks paying the federal bank tax: ANZ Bank, Commonwealth Bank, Macquarie Group, National Australia Bank and Westpac.

Mr Sims indicated its brief was wider than the bank tax, and it was looking at how banks balanced the interests of various parties when setting mortgage rates.

“The terms of reference asked us to look at how the banks balance the needs of borrowers, savers, shareholders, and the wider community when they make their interest rate decisions, and the interim report coming out next week will shed light on that issue,” Mr Sims said.

In preparing the review into one of the most politically sensitive pricing decisions faced by banks, the ACCC  had the power to request confidential internal documents from banks, including board papers.

The timing of the report's release next week was not linked to the royal commission hearings, he said. Rather, the regulator had been checking confidential information with the banks.

The scrutiny of home loan pricing comes UBS analyst Jonathan Mott has also warned bank investors the industry faces a "material risk" of customer class actions over mortgage "mis-selling.

After the Productivity Commission last month found in a draft there was a low level of price competition in the banking sector, bank analysts have predicted the ACCC will also be critical of the industry. Banks maintain returns are being squeezed by competition, but this point is debated by experts.

CLSA analyst Brian Johnson said the gap between home loan rates and the cash rate set by the Reserve Bank, which is one influence on bank funding costs, had blown out to levels not seen since the 1990s.

"The spread on a home loan relative to the cash rate is now back up to the days before Aussie Home Loans," Mr Johnson said. Mr Johnson added the banks' "pricing power" was being diminished by the wave of regulatory scrutiny.

Bell Potter analyst TS Lim predicted the ACCC might highlight the major banks' wider profit margins as a sign of weak competition - though he disputed such analysis. Mr Lim said the major banks' wider margins reflected their lower funding costs, and higher efficiency and greater scale.

 

If the report is critical of the banks, next week could be a bruising one for the reputations of Australia's big banks. Next Tuesday, the royal commission into financial services misconduct will also hold public hearings, focusing on home loans, personal loans and credit cards.

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