As the industry moves to raise professionalism and public opinion, accreditation standards will no doubt be examined more closely going forward.
Last week, CBA announced that instead of de-accrediting brokers who hadn’t written a loan with the major in 12 months, it would just require them to complete an e-learning training module to ensure they are updated on current products and criteria.
The bank also said it will no longer require brokers to write a minimum number of loans to retain accreditation.
In the past, brokers who wanted to maintain CBA accreditation had to submit a minimum of four home loan applications and settle at least three every six months, although according to CBA this was not systematically enforced.
“At CBA, we understand there are many reasons why a broker may not have submitted loans to us. We understand that a broker’s role is to provide their clients with a loan that suits their needs and objectives,” said Daniel Huggins, CBA’s executive general manager home buying, in a statement.
The royal commission revealed that in 2017 CBA revoked the accreditation of 710 brokers due to inactivity. CBA has more accredited brokers per aggregator than most other lenders, according to ASIC.
“In the past we have seen that brokers who write very little volume with the bank are unfamiliar with our systems and processes. This can lead to poor customer experiences and outcomes,” Huggins said.
Industry leaders weigh in on accreditation standards
Several major aggregator heads embraced the aim to elevate accreditation standards at MPA’s recent aggregator roundtable.
One of the specific areas of concern mentioned was what to do when a broker hasn’t written a loan with a lender in a year.
Outsource Financial CEO Tanya Sale questioned how confident these brokers would be talking to a client and writing a loan for that product after so much time away, especially in the current climate where lender policies change rapidly.
William Lockett, managing director of Specialist Finance Group, said if there’s been a year-long lapse in usage, a broker should do some re-education and training.
“But that shouldn’t automatically give accreditation back for it only to happen again,” he said.
Mark Haron, director of Connective, said he believes aggregators have let the industry down when it comes to maintaining a higher standard of accreditation.
He said if the banks could faithfully rely on all aggregators’ standards, broker quality, and training, then a straightforward online product and policy test would likely suffice to re-introduce a broker to that lender again.
While CBA’s been the first to make a move on adjusting accreditation expectations, more will likely follow.
“As we move from industry to profession, the standard of accreditation becomes very important and can always be raised and we’re always going to be seeking ways to improve,” MFAA CEO Mike Felton told MPA.
Non-major bank roundtable