Powered by MOMENTUM MEDIA
Powered by MOMENTUM MEDIA
subscribe to our newsletter

CUA boss slams biased aggregators

CUA’s top executive has called out the biases that exist among bank-owned aggregators that favour their own branded mortgages.

After a fresh round of FSI submissions brings vertical integration under further scrutiny, CUA chief executive Chris Whitehead has spoken out about the fact that banks are driving huge volumes of their own products through the aggregation groups they control.

“Those aggregators are actually driving a lot of volume through to their own labelled products, which in essence is the parent’s funding,” Mr Whitehead told Mortgage Business. “It is skewing where the business is going,” he said.

Questioning whether the competitiveness of a lender’s products would win them business on a bank-owned aggregation panel, Mr Whitehead said there is “quite a fair amount of lending going to own-label products”.

“That is one distortion that is occurring within that part of the system,” he said.

Advertisement
Advertisement

PROMOTED CONTENT


This is not the first time Mr Whitehead has made inflammatory comments about bank-owned aggregators.

In June, the CUA chief flagged a potential conflict of interest in the ability of bank-owned aggregators to gain market intelligence on their competitors’ products and pricing.

“I am concerned that there is a real potential for the majors to clone the innovative products of their competitors based on the market intelligence they are gathering,” Mr Whitehead said.

“It is simply the fact they know how well those products are going,” he said.

The regionals have also voiced their concern, claiming in their second FSI submission that while they have “no firm evidence” that vertical integration is distorting the way brokers direct borrowers to lenders, there are clear conflicts of interest.

“For example, where a broker has to pay a fee, or the aggregator retains part of the commission for utilising aggregator platform infrastructure, such as a computer system, this fee could be reduced or the full commission passed through to the broker if the broker originated a loan supplied by the broker’s bank owner,” the submission said.

“This fee discount would not need to be disclosed to the mortgage loan customer, but stands as a clear conflict,” it said.

CUA boss slams biased aggregators
mortgagebusiness

Latest News

Sentiment in the housing sector has remained negative but has been propelled by the HomeBuilder scheme, which has so far received 11,367 ap...

The central bank has updated its monetary policy outlook, with governor Philip Lowe touting the benefits of further adjustments to the cash ...

NAB has announced that it will open a new waitlist for the FHLDS New Home Guarantee and start accepting conditional approval applications fr...

FROM THE WEB

Join a group of highly informed brokers.

Broker Pulse, a community-driven knowledge base of lender performance Reveal exactly which lenders are making life easiest for brokers and their clients by taking this monthly survey and joining a group of highly informed brokers who leverage these insights every month.

JOIN NOW
podcast

LATEST PODCAST: Victoria’s surprising appetite for new homes

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.