A daily download of SME, startup, fintech and tax news from around Australia.
The mortgage broker industry has reacted with fury to the release of the banking inquiry’s final report, warning that a sweeping ban on commissions could “ruin” many small businesses and lead to borrowers paying higher interest rates.
From mid-next year, banks will be banned from paying mortgage brokers so-called “trail commissions” — described witheringly by Commissioner Kenneth Hayne QC as “money for nothing” — on new loans.
Small business owners could be most impacted once the final report of the Royal Commission is released later today.
According to Scottish Pacific CEO Peter Langham, the impact of the Royal Commission will be far and wide and there are growing fears that small businesses will find it even harder to access funding.
The final report of the banking royal commission released on Monday has left lending to small business mainly unchanged.
There was no extension of consumer credit laws to SMEs however the report did recommend expanding the definition of small business.
Today, the Government releases its response to the landmark Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry.
The Government has agreed to take action on all 76 recommendations contained in the Royal Commission’s Final Report and, in a number of important areas, is going further.
Stricter and clearer rules for lending to farmers will come into force to better protect agricultural property owners in times of financial distress such as drought.
However, the Hayne royal commission recommended the responsible lending laws for consumers not be extended to small businesses more generally because such a move would likely increase the cost of credit and make loans harder to obtain for small firms.
A survey of more than 1,000 small businesses found while overall SME confidence is at a decade high, the retail sector is the most pessimistic of any industry about sales and profitability into 2019.
More than one quarter of retail businesses reported being worried about the coming months, compared with just 5 per cent of businesses in the cafe and restaurant space.
Consumers and small business ripped off by financial firms will benefit from an industry funded compensation scheme, while a new oversight authority will better hold financial regulators to account under the government’s response to the banking royal commission.
The Morrison government has agreed to act on all of the 76 recommendations made by Kenneth Hayne’s royal commission with Treasurer Josh FrydenbergThe Hon. Josh Frydenberg MP, Federal Member for Kooyong Minister for Resources, Energy and Northern Australia from 21.9.15 saying action would be taken to restore trust in the financial system while maintaining access to credit.
ANZ has invested an undisclosed amount in a UK fintech platform that offers financial institutions and companies a way to take part in open banking. Bud’s platform acts as an additional layer of technology that increases the functionality of new or existing apps. Through APIs, Bud is essentially offering a way for banks to securely connect to fintechs through existing bank apps. If its Series A funding round is anything to go by, the banks are on board.
Bud raised $20 million from a number of high-profile financial institutions globally with the round co-led by HSBC and Goldman Sachs. Other financial institutions that took part in the Series A funding include ANZ, South Africa’s Investec and Spain’s Banco Sabadell.
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