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Banking reforms bad news for brokers

Treasurer Wayne Swan’s proposed banking reforms could have negative ramifications for brokers.

It is hard to tell what impact any banking reforms would have on brokers until they are formally introduced, the government’s plan to slash mortgage exit fees could force lenders to recoup these costs elsewhere.

I think there is a good chance the banks may look to recoup their costs from mortgage brokers.

Indeed if exit fees are removed, we could see commissions cut or clawbacks increased.

Like all businesses, banks do need to pass on their costs to customers, but whether the banks just absorb those costs off their profit line or whether they pass them on in some other way is down to the individual bank.

If mortgage broker commissions are cut further we will need to charge the consumer for the service or close up shop.

This is typical of labour governments making changes that suit the end consumer but dam the small business owners. When will they ever learn that it is the small business owners that employ the most people which in turn keeps this country going?

Take the governments paid parental leave scheme, great idea but expecting a small business owner to implement a welfare scheme is not only unreasonable but costly also.