Powered by MOMENTUM MEDIA
subscribe to our newsletter

Lender seeks to debunk non-bank ‘myths’

The chief lending officer of a credit provider has sought to refute the “myths” associated with non-bank lending amid concerns raised by financial regulators.

Speaking to Mortgage Business’ sister publication, The Adviser for its livestream webcast, chief lending officer of La Trobe Financial Cory Bannister sought to “debunk” what he has perceived as “myths” regarding the rise of non-bank lending.

Over the past few months, financial regulators have raised concerns over the rise of non-bank market share, with the Reserve Bank of Australia (RBA) warning that continued growth in loans issued by non-banks could pose “financial stability risks”.  

The Council of Financial Regulators (CFR) has also noted the rise of non-banks in its latest quarterly statement, claiming there is evidence that housing credit through the channel is “growing significantly” in comparison to credit issuance through established banks, particularly for the purpose of property development.

The CFR also noted that its members have “supported efforts to expand the coverage of data on non-ADI lenders” through new data collection powers recently granted to the Australian Prudential Regulation Authority (APRA).

Advertisement
Advertisement

However, Mr Bannister has expressed concern regarding the portrayal of non-banks, particularly by the mainstream press, as unregulated “shadow banks”.

The La Trobe Financial executive stressed that non-banks were subject to the same regulatory guidelines as established banks.

“One of the concerns I have is that in mainstream media, non-banks are often reported as ‘shadow banks’ and one myth would be that they’re unregulated,” he said.

“We (non-banks) have an Australian Credit License, with the same responsible lending guidelines as any major bank. So in terms of regulation, we are regulated exactly the same way as the major banks, and I think that’s often forgotten.”

Mr Bannister also sought to dispel claims that the pricing of loan products offered by non-banks placed disproportionately higher financial burdens on borrower, claiming that “non-bank options have more competitive options than the major banks”.

PROMOTED CONTENT


Further, Mr Bannister stated that the non-bank channel would remain viable over the long term, despite concerns over institutional stability in the sector.  

“I think [the] injection of funding from overseas really validates the proposition of non-banks in Australia, and I think it sends a really positive signal to the market, that it is a very stable and viable sector, it’s not something that’s ‘shadowy’ or ‘under the table’.”

Mr Bannister joins CEO of Liberty Financial James Boyle and managing director of Firstmac Kim Cannon in addressing concerns raised by regulators and established banks regarding the growth of the non-bank sector.

[Related: Quarrel between banks and non-banks continues]

Lender seeks to debunk non-bank ‘myths’
Boxing gloves
mortgagebusiness

Charbel Kadib

Charbel Kadib is the news editor on the mortgages titles at Momentum Media.

Before joining the team in 2017, Charbel completed internships with public relations agency Fifty Acres, and the Department of Communications and the Arts.

You can email Charbel on: This email address is being protected from spambots. You need JavaScript enabled to view it.

Latest News

The non-bank lender has launched an IPO at an offer price of $2.89 per share to raise $500.1 million. ...

The shareholders of the neobank have agreed to the scheme of arrangement that would see NAB acquire all the issued share capital in the comp...

ASIC has begun proceedings against the major bank for insider trading and breaches of its licensee obligations during the privatisation of A...

FROM THE WEB

Do you expect to see strong uptake of the HomeBuilder scheme?

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.