MFAA Pushes Back on Lead Generation Reforms — What It Could Mean for Borrowers Seeking Non-Bank Loans

Australia's peak mortgage broking industry body, the Mortgage & Finance Association of Australia (MFAA), has submitted a response to Treasury's consultation on lead generation practices in the financial sector — calling for careful, targeted reform that protects both consumers and the broker channel that serves them.

The consultation, which is still open, focuses on how financial service leads are generated and referred, including third-party arrangements between lenders, aggregators, brokers, and comparison platforms. The MFAA's position: reform is needed in some areas, but poorly drafted rules could have serious unintended consequences for borrowers — particularly those who rely on brokers to access non-bank and specialist lenders.

What Is the Consultation About?

Treasury is examining the lead generation ecosystem — the chain of referrals, partnerships, and commercial arrangements that connect borrowers with lenders. Concerns in this space have included:

• Undisclosed commissions or referral fees
• Incentives that prioritise lender profit over borrower outcomes
• Digital comparison platforms that may not fully disclose commercial arrangements

These are legitimate consumer protection issues. But the MFAA argues that any reforms must be precisely targeted — not a blunt instrument that treats mortgage brokers (who are already subject to Best Interests Duty under NCCP legislation) the same as less-regulated referral operations.

Why This Matters for Non-Bank Borrowers

For borrowers who need a non-bank lender — including self-employed applicants, new migrants, and those with complex income structures — the broker channel is not just convenient. It is often the only realistic pathway to products that fit their needs.

Major bank branch networks typically offer only their own products. Digital comparison platforms are often heavily weighted toward major lenders with marketing budgets. Specialist and non-bank lenders like MPFG Capital reach the borrowers who need them almost entirely through the broker network.

If lead generation reforms inadvertently restrict how brokers can partner with non-bank lenders, or increase compliance costs to the point where brokers reduce their non-bank panel, the impact falls disproportionately on non-standard borrowers.

The MFAA's Position

The MFAA's submission advocates for:

1. Clear exemptions for Best Interests Duty-regulated brokers who already operate under consumer protection obligations
2. Targeted rules for unregulated referrers — particularly lead generation businesses that sell consumer data without proper disclosure
3. Preservation of commercial arrangements that fund the broker channel and keep advice free for borrowers

The association's broader point: removing or restricting the broker channel would not improve consumer outcomes — it would concentrate lending further into major bank branch networks, reducing competition and access for non-standard borrowers.

The Broker's Role in a Non-Bank Ecosystem

Australia's mortgage broking channel now writes approximately 73% of all new home loans (MFAA industry data). For non-bank products, broker share is even higher — non-bank lenders have no branch network and rely almost entirely on broker referrals.

A borrower who is self-employed, recently arrived in Australia, or has income that doesn't fit a payslip template is far more likely to find a suitable product through a broker than by walking into a bank branch or using a comparison website.

What Borrowers Should Know

For now, nothing has changed. The consultation is still open and no legislation has been introduced. But borrowers — particularly those with complex situations — should be aware of where their options come from:

• If you've been rejected by a major bank, a good mortgage broker with access to non-bank lenders is your best resource
• Ask your broker what their panel looks like — how many non-bank and specialist lenders do they access?
• Best Interests Duty means your broker is legally required to act in your interest, not the lender's

MPFG Capital works closely with accredited mortgage brokers across Australia. If you're a broker with clients who need Alt Doc, commercial, or bridging finance solutions, contact us to discuss your panel options.

This article is for information purposes only and does not constitute financial advice. MPFG Capital holds Australian Credit Licence 553698.