FEATURES • CCCFA
Banks speak on CCCFA The lowdown on what the major banks will expect from advisers following the impending CCCFA changes.
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BY PHILIP MACALISTER iwibank chief executive Steve Jurkovich says the impending CCCFA changes will be quite hard, but people will get used
to it. “Customers will be frustrated by what they perceive as extra hoops they have to go through,” he says. There will be a settling in period, and it will be good for mortgage advisers. “It will support the growth of the adviser market,” he says. “The adviser will do all the mahi.” He says it will be hard for a borrower if they try to do it themselves and approach multiple lenders. Jurkovich describes it as a “once in a generation change” and the fact that liability sheets home to directors and bank officers “sharpens the focus”. That has been the experience in the Australian market. But he says: “Ultimately satisfying the customers can afford [the loan] and being responsible is not a bad thing.” Jurkovich warns that when borrowers get to the end of a fixed rate period and want to check out their options they won’t just be able to rollover a loan. Lenders will have to ask for more information than they do currently, even if it is the same lender. It won’t be “tougher” to get the money, but it will be more “onerous”. Jurkovich, overall, is not too concerned. “We will get through it and in a year’s time we will be wondering what all the fuss was.” He compares it to when AML came in. “It’s a bit harder but people get used to it.” The good thing is that it’s uniform for the whole industry and no one will get an advantage. ASB chief executive Vittoria Shortt takes a different view. She is “worried” and warns there may be “unintended consequences” of the new legislation. She says if that is the case then she will “call them out”. “If there are outcomes which don’t make sense from the customers’
‘It will support the growth of the adviser market’ Steve Jurkovich perspective then I think we have to call them out.” Shortt says Australia proposed similar legislation but subsequently did not implement it. She says it will take longer to process a loan application, and there may be unintended consequences. “That is why Australia did not go ahead with it.” She warns the CCCFA changes are material and impact not just home loans, but all lending including credit cards and personal loans. “It will be significant for the whole market,” she says. “We have to keep a really close eye on it.”
What advisers will have to do Representatives from the four big banks told a Financial Advice New Zealand webinar that there will be changes advisers need to adapt to. The key message was that advisers will have to have conversations with clients about income and affordability. This information will need to be recorded and validated. Just saying the conversation has been had with a customer will not be good enough. BNZ general manager, third party, Adam Ward says if information is not recorded and validated then in the regulator’s eyes it didn’t happen. There will also be changes to UMI calculators and greater detail required about a client’s income. Just putting
a number into the “other” field will not be good enough. ASB head of third party banking Amanda Young said the bank is making 10 key changes to its process; some will have no or a low impact and others “moderately high”. The bank has developed tools to capture the new obligations, an adviser declaration form as a way of attesting to CCCFA obligations and a redesigned adviser guide book. Westpac head of third party banking Liz Cannon said the responsible lending declaration form the bank introduced three years ago had served it well and helped ensure the bank was doing the best it could to meet its obligations.
‘If there are outcomes which don’t make sense from the customers’ perspective then I think we have to call them out’ Vittoria Shortt For advisers who submit deals to Westpac CCCFA “won’t be a major change”. ANZ will have an upfront declaration form that advisers will have to provide before assessment of a loan application can start. In essence advisers will have to share detailed information of the conversations they are having with clients with lenders. ✚ WWW.TMMONLINE.NZ
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