Tom Elliott: The Banking Royal Commission report has got one thing very wrong
Tom Elliott says the Banking Royal Commission report could have devastating ramifications for an innocent party, while the big banks effectively get off scot-free.
“This is going to surprise a lot of you but I reckon the report’s got one thing majorly wrong,” Tom said.
“There are 76 recommendations and most of them make sense, not taking fees from people who are dead, is a good example.
“But something I just cannot understand, and I’ve had a lot of angry emails about it overnight, is the Royal Commission’s attitude towards mortgage brokers.”
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Tom said in turn for sourcing a loan for you, mortgage brokers receive a commission, where the bank splits some of the interest that you pay, it keeps some for itself and gives some to the mortgage broker.
But it doesn’t cost the customer any more.
“One of the controversial recommendations is to stop the sharing of commissions between banks and mortgage brokers, and I don’t understand it!” Tom said.
“It is going to put the mortgage broking business out of business.
“The evil-doers in this whole banking investigation, are the big banks themselves, they’re the ones who have ripped off customers, they’re the ones that should be punished.
“Your average mortgage brokers are a mum and dad operation.
“They are the ones that are being punished by effectively having their entire business model ripped out from underneath them.”
Peter White, managing director of the Finance Brokers Association of Australia, told Tom he was “absolutely flabbergasted” at the recommendation.
“To make these sort of decisions in the manner in which they’ve done is the one area which is a major fail,” he said.
“The risks now to about 20,000 businesses and their families, is as you rightly pointed out, they could be out of business.”
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