This article originally appeared on Broker News on 12/3/18 by Manuelita Contreras.
All eyes are on the mortgage lending market this week as the royal banking commission kicks off its first round of public hearings tomorrow, focusing on consumer lending. But there is more to come this week: the Australian Competition and Consumer Commission is releasing its report on its residential mortgage price inquiry.
A spokeswoman to the ACCC confirmed to Australian Broker last Friday that the commission plans to release the interim report this week.
The report will add to the plethora of inquiries into mortgage lending, which have mostly centred on the major banks. But unlike the other inquiries, this one has had access to banks’ confidential information.
The ACCC has said that it has powers to demand information from banks, including confidential documents. It can force banks affected by the Major Bank Levy to explain changes to fees, charges, or interest rates in their residential mortgage products.
Treasurer Scott Morrison ordered the ACCC inquiry in May 2017 when banks threatened to pass on the $6.2bn bank levy – announced back then by the government – on to customers.
The major levy applies to banks with more than $100bn in total liabilities – which include CBA, ANZ, Westpac, NAB, and Macquarie Bank.
ACCC chairman Rod Sims said at the start of the probe that the inquiry would alter mortgage pricing behavior in the market.
The commission’s inquiry is not expected to impose penalties on banks unless they are found to have violated competition laws, but it is expected to have an impact on how banks price their mortgage products.
Sims said in January that its draft report into mortgage price competition would uncover “some surprises” and provide clarity around the major banks’ mortgage pricing decisions from June 2017.
The inquiry covers mortgage prices charged until 30 June 2018.