ACCC allows self regulation for Mortgage Industry Association

The Mortgage Industry Association of Australia's Disciplinary Rules have been granted authorisation* by the Australian Competition and Consumer Commission.

"The ACCC considers that the Disciplinary Rules are likely to assist member mortgage brokers to act ethically and professionally in the industry, therefore resulting in a net public benefit", ACCC Deputy Chair, Ms Louise Sylvan, said today. 

"The ACCC also encourages the MIAA to adopt some of the proposals made by interested parties in relation to its governance regime, which the Disciplinary Rules enforce.  The ACCC considers that these are likely to enhance the public benefit flowing from the scheme.

"In particular, the ACCC notes that several interested parties called for the governance regime to be subject to an external review, a wide range of amendments be made to the Code of Practice, and for tribunal decisions to be publicly available", she said.

The MIAA is an industry association for mortgage brokers. It currently has around 5700 members, consisting of loan writers (70 per cent) and 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.

BACKGROUND

* 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. 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.