There are calls from some brokers and lenders for banks to be more transparent in regards to which other banks, aggregators and brokerages they own.
To help inform and protect consumers, Bankmecu has told the Financial System Inquiry that the federal government should introduce laws that would require sub-brand advertising to reveal the owner bank logo or name with equal prominence.
P&N Bank, which like Bankmecu is a customer-owned bank, also made a submission to the inquiry.
“The oligopolistic dominance of the big four banks and their sub-brands is well documented,” they said.
“The situation is compounded by the fact that the major banks own a large number of home loan broking brands.”
Ray Backhouse from Ray Backhouse Financial Services told The Adviser that he agreed with the submissions and that sub-brands needed to be more upfront with borrowers.
“It gives the general public knowledge of the fact that the marketplace is a lot narrower than they think,” he said.
“Although they tell you that they operate independently, clearly their owners have got a big influence on the availability of funds.”
Also speaking to The Adviser, Les Scott from Les Scott & Associates said greater transparency would protect consumers.
He said the public had a right to know who owned what, especially when sub-brands promoted their small bank status as a selling point.
FBAA president Peter White said greater transparency was good in theory but its benefits were negligible.
“The consumer doesn’t care – as long as he’s getting a good deal,” he said.
