ASIC to ease mortgage broker requirements

ASIC has released proposals for modifying the training requirements for credit representatives who provide credit assistance to consumers on home loans. 

The proposals are aimed at addressing mortgage broking industry concerns about the cost of complying with the licensing regime while offering adequate protection for consumers. 

Figures compiled by Market Intelligence Strategy Centre revealed that the number of mortgage broking firms operating in Australia has contracted by 26% in the year to March 2011, with compliance costs and commission cuts key factors in this contraction.

Currently, credit representatives who provide “mortgage broking services” are required to obtain a Certificate IV in finance and mortgage broking, but have until June 2014 obtain the qualification.

The course costs about $2,000 and takes a week to complete.

The consultation paper proposes two possible modifications:

• refining the definition of ‘mortgage broking’ in the regulatory guide, so that it is limited to providing credit assistance in the form of ‘suggesting’, where credit is secured by real property; and/or
  
  
• allowing those falling within the definition of mortgage broking who provide services on behalf of a particular credit provider to undertake a proportion of the Certificate IV in finance and mortgage broking.

Depending on the feedback received, ASIC proposes to implement one or both of these approaches.

‘The proposals aim to reduce licensees’ compliance burden, while still ensuring a high standard of training for those who do play a significant role in such decisions,” says ASIC commissioner Peter Boxall.

“Our proposed changes to the training requirements should enable representatives of credit providers who are providing mortgage broking services to focus on units of training most relevant to their roles,” he says.

Industry participants have until September 16 to comment on the proposals, with a new regulatory guide covering training and competencies to be released in October.

The Mortgage and Finance Association of Australia requires all members to hold a Certificate IV in order to join or maintain membership.

As of July 1, 2012 the minimum MFAA membership educational requirement will be a diploma of financial services (finance and mortgage broking management).