Prepare For A Right Royal Screwing

So what do you get for $75 million dollars?

Well recently you could have bought 12mths of evidence and testimony that has proven the big four banks in Australia are the most corporately reprehensible institutions in the country – tick.

Lies, theft, corruption, dishonesty, malpractice, greed - tick.

Lines and lines of everyday Australians who lost everything thanks to the above – tick.

Countless multimillionaire CEOs and executives who fronted these organisations and oversaw the actions as listed above – tick.

And the outcomes and recommendations from this 12 months of investigation that will send this criminals to jail, break up the monopolies, prevent any of this type of going on again – ummmm, yeah not so much.

The banks, the big four specifically and their leaders,CEOs and executives, have have pretty much escaped any punishment.

Their share price has gone up and the structures that have allowed them to screw consumers for the past decade have been left in place.

But what they have been given is a profit boost, worth multiple billions over the coming years.

Yep. Billions.

And those billions are going to come from, in part, you.

You see the Royal Commission has recommended, that all home loan applicants now pay a multi-thousand dollar fee every time they apply for a home loan, and along with that, the banks will stop paying mortgage brokers any commission.

Yes you have read that correct. Unlike some of the tit bits of information that has been floating around on the interweb and in the media, ALL borrowers, regardless of whether they use a bank or mortgage broker will now be slogged a new fee – think anywhere between $3,000 to $5,000.

And along with that all mortgage broker commissions, currently paid by the lenders, will also cease. So the banks will get to keep the commissions and your new upfront fee.

According to a report by leading international financial services company Credit Suisse, the big four alone will make an additional $1.8 billion after hold onto mortgage broker commissions – that’s excluding the new home loan application TAX that you’ll all be slogged.

Consumer group CHOICE thinks this a great idea, so does the Labor party.

Putting 22,000 mortgage brokers out of business, gifting the major lenders several billion (after what they did that lead to the Royal Commission in the first place?), and increasing the cost of a mortgage by several thousands of dollars – if you’re a first home buyer how’s that saving plan looking now?

Remember CHOICE is a consumer action group, they are advocating for a reform to make home loans more expensive? Yes, sounds strange doesn’t it?

Oh, and there’s also the chance that your interest rates will go through the roof, because the opportunity to refinance from one lender to another for a better rate, will evaporate thanks to the big new home loan tax that will no longer make it cost effective.

Of course the bank may decide not to take advantage of that, and not increase rates, and then they may continue to do what they have for 20 odd years and continue to bleed their customers dry. You know, with all those harsh reforms and criminal charges they will face thanks to the Royal Commission….

“These policy recommendations are effectively a new multi-thousand-dollar tax on borrowing. They will put the broker channel at severe risk, damaging competition and access to credit and entrench bank power,” says Mortgage & Finance Association of Australia CEO Mike Felton.

The changes have left everyone with a brain confused, dumbfounded and bamboozled that after a year’s worth of Royal Commission, this is the result the process came up with.

“This royal commission is about the greed of the big banks and insurance companies, and so it should be because their behavior has been appalling,” said Peter White, head of the Finance Brokers Association of Australia.

“The biggest winners from the royal commission are demonstrably the big banks,” says Australian Financial Review contributing editor Chris Joyce

“Indeed, the top end of town have done an amazing job convincing everyone that brokers should be made the ‘fall guys’ for their own deeds, surreptitiously fattening their profits, despite no evidence of pervasive misconduct,” Mr Joye said.

Yeah, remember all that evidence proving what the banks did? The Royal Commission could find any with clients or loans that had come from the mortgage broker industry.

For the time being, the recommendations remain just that: recommendations.

They’re not set in stone. Not yet.

Because while the Coalition and Labor have both said they’ll take action on all 76 recommendations in the report, there is an election coming up.

Enough noise made now could result in one of the two major political parties sitting up and taking notice.

This is going to cost you if you have a home loan, or would like one in the future.

But rest in the knowledge that the massive new tax you’re going to have to pay on your next home loan, and the increased interest rate that your lender will increase due to the inability to refinance, will go a long way to assisting those struggling big banks who have to pay the hefty salaries of those wonderful CEOs.