"The Australian Competition and Consumer Commission is proposing to grant authorisation* to the Mortgage Industry Association of Australia (MIAA) for its Disciplinary Rules", ACCC Deputy Chair, Ms Louise Sylvan, said today.
"In its draft determination the ACCC found that the MIAA's Disciplinary Rules are unlikely to restrict competition in the mortgage broking industry.
"At the same time, the ACCC considers that the MIAA's governance regime which the Disciplinary Rules enforce, are likely to assist member mortgage brokers to act ethically and professionally in the industry, therefore resulting in a benefit to the public," Ms Sylvan said.
"However the ACCC notes the concerns raised by some interested parties that the MIAA governance regime has never been subject to an external review, and also that decisions on a member's conduct made by the Tribunal are not automatically publicly available. The ACCC encourages the MIAA to address these concerns, as it considers they would enhance the public benefit flowing from the scheme."
The MIAA is an industry association for mortgage brokers. It currently has around 5700 members in total, consisting of loan writers (70 per cent of members), with the remaining members being mortgage broker businesses, lenders and mortgage managers. MIAA states that it represents around 45 per cent of the loan writers in Australia and around 75 per cent of the mortgage brokers, lenders and managers.
The MIAA Disciplinary Rules are part of its governance regime which sets out standards of conduct for the industry and a process for an independent Tribunal to hear allegations of misconduct against members. If a member is found guilty of misconduct, the Tribunal has power under the Disciplinary Rules to sanction or expel the member from the MIAA.
The ACCC also has a role in endorsing effective industry codes of conduct that aim to achieve best practice within an industry. The endorsement process is quite distinct from the authorisation process. The authorisation process is set out in the Trade Practices Act and only indicates that a code passes a certain legal test. Authorisation does not indicate that a code is best practice and, this proposed authorisation can in no way be held out as endorsement or approval by the ACCC of the MIAA's governance regime.
* The Trade Practices Act 1974 prohibits competitors agreeing to work together in a way which prevents, restricts or limits the supply of goods or services. Authorisation provides immunity from court action arising from such agreements but can only be granted where the ACCC is satisfied that the public benefit arising from the conduct outweighs any public detriment.