FED:Govt to ban mortgage exit fees

AAP General News (Australia)
12-12-2010
FED:Govt to ban mortgage exit fees

MELBOURNE, Dec 12 AAP - Home owners will be able to switch mortgages without paying
exit fees under a new federal government plan to give customers a better deal from Australia's
banking system.

Treasurer Wayne Swan will announce a reform package on Sunday to ban exit fees from
mid-2011 and support smaller lenders to bolster competition in the sector, Fairfax newspapers
say.

"Competition is the best way to keep interest rates lower over time, and helping Australians
walk down the road and get a better deal if their existing lender isn't looking after
them is crucial to that," Mr Swan said.

The government will also launch a deposit-protection symbol to assure customers their
money is as secure with smaller credit unions and building societies as it is with the
"big four" banks.

And consumer watchdog the Australian Competition and Consumer Commission will be given
greater powers to patrol the practice of price signalling, in which banks announce intentions
to raise interest rates.

Australian Bankers Association chief executive Steven Munchenberg said mortgage fees
reflect costs and will hurt small lenders the most.

"It is much harder for smaller lenders to distribute costs across their business, unlike
the major banks," he said.

The reforms are due to begin on July 1, 2011.

AAP ees/ao

KEYWORD: BANKS SWAN

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