‘High regulation on the cards’ for non-banks under APRA

Firstmac’s Kim Cannon increasingly concerned by new regulatory oversight but not all non-banks agree at MPA’s roundtable

‘High regulation on the cards’ for non-banks under APRA
Firstmac’s Kim Cannon increasingly concerned by new regulatory oversight but not all non-banks agree at MPA’s roundtable

APRA’s proposed oversight of non-banks has divided opinion at MPA’s first ever non-banks roundtable yesterday.

Firstmac founder Kim Cannon warned that regulatory oversight of non-banks could be tougher than expected. Having made a joint submission alongside roundtable participants Pepper, Liberty and RESIMAC, Cannon said that in the past week “I did see commentary coming back from Government along the lines of ‘thanks for your advice, but’; I think they’re going to ignore a fair bit of it.” 

Cannon questioned how far the regulation would go: “do they try and regulate us to death like they tried to regulate to death the small ADIs?”

Liberty Financial’s John Mohnacheff was also concerned: “what will be, will be; we just hope that the government doesn’t take a sledgehammer approach to this regulation.”

Reserve power

Not all of MPA’s roundtable was as concerned as Cannon.

La Trobe Financial’s vice president Cory Bannister suggested that APRA’s power was a reserve power to be used only as needed, adding that “we see it as recognition by APRA that non-banks are potentially going to play a much bigger part in the industry than what they did in the past.” 

Non-banks already originate many of their loans in line with bank – and thus APRA – guidelines, according to RESIMAC and Homeloans general manager of third party distribution Daniel Carde: “it’s more just the concern of when it will be enacted and what they’re trying to change with it.” 

'Chasing the scraps'

Also present at the roundtable was Pepper’s director of sales and distribution Aaron Milburn and Better Mortgage Management managing director Murray Cowan.

The roundtable discussed APRA, property investors, non-resident borrowers and changing public perceptions, in addition to responding to questions from viewers.

Whilst several of the non-banks indicated they were interested in lending to non-residents, characterising them as prime borrowers, they warned that the ‘tidal wave of applications’, as Liberty’s Mohnacheff put it, could be difficult to manage. 

Firstmac’s Cannon took a very different view with his assertion that non-banks should not be ‘chasing the scraps’ and should concentrate on prime owner-occupiers.

You can watch the entire roundtable for free on http://www.mpamagazine.com.au/tv/