ASIC has revealed that the banks will be footing the bill for the additional funding required to expand its investigations into the mortgage industry, including broker remuneration.
Federal Treasurer Scott Morrison yesterday confirmed the government will proceed with reported changes to surveillance of the banking and financial system, following speculation of a major shake-up.
Mr Morrison said the banks will be expected to foot a $121 million bill to increase the corporate regulator’s resources. The additional sum will come from the levy the banks already pay, with taxpayers contributing another $6 million.
ASIC welcomed the government’s announcement of major additional funding, which it said will be used to strengthen surveillance in the financial services industry and enforce regulations in the sector.
ASIC deputy chairman Peter Kell said the money will enable the corporate regulator to focus on several key areas, including the home loan sector.
“We will be undertaking some major reviews in the areas of responsible lending,” Mr Kell said.
“We will be able to expand our follow-up with the review of mortgage brokers and remuneration structures in the lending sector.”
Mr Kell added that ASIC will also undertake a project on loan fraud and related problematic behaviour.
ASIC chairman Greg Medcraft, meanwhile, said the regulator is eager to “get on with the job”.
“I want Australians to know that there is a tough cop on the beat. I think I’ve demonstrated that recently, that we are willing to take anyone on, no matter how big you are,” Mr Medcraft said.
“Action speaks louder than words. In the last two months, we have launched action against two of the largest banks in the country and we continue to look at the others.”
Mr Medcraft noted that in the last four years, ASIC has undertaken more than 6,000 high intensity surveillances across all sectors in Australia, conducted more than 900 investigations and convicted over 100 people.
“Over 55 people who were actually sent to jail. We have banned over 650 people from participating in the industry over the last four years,” he said.
“We have done a lot and we will do more because we have more money and more powers.”
[Related: Regulators announce mortgage market probe]