Banking Review

Exit stage left

As ASIC consults with the industry on how it should enforce tougher rules targeting mortgage exit fees under new unfair contract laws, how worried are the lenders?

BY ELTON CANE

The Australian Securities and Investments Commission released a paper on June 27 consulting the industry on how it should tackle excessive early exit fees for mortgages as part of the National Credit Code. The proposal , which took effect from July 1, will allow borrowers to challenge early exit fees if they feel the fees are ‘unconscionable or unfair’.

The basis for this move was set as far back as 2008, when ASIC published a paper based largely on figures provided by Fujitsu Consulting and JPMorgan, which compared Australian mortgage fees internationally and looked atthe range and type of fees charged by lenders.

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