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Common approach by banks to loans might be nice but hard to achieve off – bank executives

Banks would love to have standardised processes for loans but no change is imminent, financial advisers have been told.

Wednesday, February 2nd 2022, 2:09PM 1 Comment

by Eric Frykberg

And advisers themselves as well as bankers could play a part in streamlining the messy business of trying to borrow money.

Advisers have long complained that having to fill out different forms for different banks adds to the clutter caused by the Credit Contracts and Consumer Finance Act (CCCFA).

But a frequent response has been that the Commerce Commission might see a common approach by competing banks as collusion.

Speaking on a Financial Advice webinar, the ANZ said it would be a good thing if approaches to loans were standardised.

Baden Martin is head of Mortgage Adviser Distribution for the bank said it would allow banks to receive structured data which could be processed quickly and efficiently.

“I have been in a number of groups over the years where we have tried to get something going industry-wide. Most recently, around the CCCFA, we have asked, is there a way where we can have standardised declarations?

“You would think that would be easy to achieve, but unfortunately, to date it hasn't been.

“However, it is still a work in progress, there is a genuine desire there, not only from advisers but from banks themselves to get structured data that would improve turnaround times.”

Martin then went on to express doubt about whether this would proceed with any speed. He said it would require a lot of goodwill from banks' legal teams, working in good faith with each other, to arrive at documentation that is acceptable across the industry.

There were also reservations from Adam Ward, who is general manager of Third Party Distribution at the BNZ.

“I might be falling over myself to work with my colleagues (in different banks) but my legal team and my compliance team might not be,

“There are a multitude of different forms that make (co-operation) really hard. It's not a matter of not wanting to, it is just challenging.”

But Ward went on to say there could be a solution.

“If an industry body could take the lead on that for us, that makes it easier.

“It then separates it out, so it is not 'bloody BNZ' or 'bloody ANZ – it's the industry as a whole.”

And Ward had a challenge for the advisers themselves – the solution could be in their hands.

“If the aggregator groups themselves could agree on a standard format that they use to dish up the information to us, then that could be another solution.

“At present you've got 13, 14 or 15 aggregator groups all doing it differently, so there is not just one problem to fix.

“Trying to say the banks should do it … with the regulator groups we face, that is just challenging.”

Two industry bodies, the Bankers Association of New Zealand and Financial Advice New Zealand have been approached for comment about what if anything they might do about Ward's suggestion.

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Comments from our readers

On 3 February 2022 at 11:21 am Peter Wood said:
I think a common path to tackle this is through the use of technology i.e. electronic lodgement from aggregator CRM's direct to lenders platforms. Lenders can then specific their requirements upfront. If lenders have any additional requirements over and above the application from a compliance / legal point of view this potentially could be handled at the loan documentation stage when the borrowers execute documents.

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Lender Flt 1yr 2yr 3yr
AIA 5.35 4.49 5.25 5.55
ANZ 5.54 5.15 5.85 6.15
ANZ Blueprint to Build 2.78 - - -
ANZ Special - 4.55 5.25 5.55
ASB Bank 5.35 4.49 5.25 5.55
Avanti Finance 5.45 - - -
Basecorp Finance 6.45 - - -
Bluestone 5.29 7.49 7.59 -
BNZ - Classic - 4.55 5.25 5.45
BNZ - Mortgage One 5.55 - - -
BNZ - Rapid Repay 5.55 - - -
Lender Flt 1yr 2yr 3yr
BNZ - Std, FlyBuys 5.55 5.35 5.94 5.99
BNZ - TotalMoney 5.55 - - -
CFML Loans ▲6.45 - - -
China Construction Bank 5.50 5.40 6.14 6.40
China Construction Bank Special - 4.45 5.19 5.45
Credit Union Auckland 5.95 - - -
First Credit Union Special 5.85 4.70 5.20 -
Heartland Bank - Online 4.00 3.85 4.70 4.84
Heretaunga Building Society 5.95 4.80 5.50 -
HSBC Premier 5.49 4.39 5.15 5.39
HSBC Premier LVR > 80% - - - -
Lender Flt 1yr 2yr 3yr
HSBC Special - - - -
ICBC 5.25 ▲4.29 ▲5.09 ▲5.35
Kainga Ora ▲5.43 ▲4.57 ▲5.58 ▲5.85
Kainga Ora - First Home Buyer Special - 2.25 - -
Kiwibank 5.00 5.55 6.19 6.39
Kiwibank - Offset 5.00 - - -
Kiwibank Special 5.00 4.55 5.19 5.39
Liberty 4.84 - - -
Nelson Building Society 5.95 4.95 5.85 -
Pepper Essential 3.44 - - -
Resimac 4.59 5.60 6.16 6.29
Lender Flt 1yr 2yr 3yr
SBS Bank 5.29 4.69 5.35 5.49
SBS Bank Special - 4.19 4.85 4.99
Select Home Loans 4.09 4.29 4.86 5.09
The Co-operative Bank - First Home Special - ▲4.19 - -
The Co-operative Bank - Owner Occ 5.45 ▲4.29 5.19 5.45
The Co-operative Bank - Standard 5.45 ▲4.79 5.69 5.95
TSB Bank 5.59 ▼5.14 6.05 6.15
TSB Special 4.79 ▼4.34 5.25 5.35
Unity 5.65 ▲4.80 ▲5.50 -
Wairarapa Building Society 5.24 4.55 5.20 -
Westpac 5.54 5.09 5.79 6.09
Lender Flt 1yr 2yr 3yr
Westpac - Offset 5.54 - - -
Westpac Special - 4.49 5.19 5.49
Median 5.45 4.55 5.25 5.52

Last updated: 16 May 2022 9:03am

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