{"id":6167,"date":"2020-11-20T00:41:19","date_gmt":"2020-11-20T00:41:19","guid":{"rendered":"https:\/\/brighten.com.au\/resources\/media-centre\/non-banks-urge-revamp-of-tff-criteria\/"},"modified":"2022-03-28T14:36:05","modified_gmt":"2022-03-28T03:36:05","slug":"non-banks-urge-revamp-of-tff-criteria","status":"publish","type":"media-centre","link":"https:\/\/brighten.com.au\/zh-hant\/media-centre\/non-banks-urge-revamp-of-tff-criteria\/","title":{"rendered":"Non-banks urge revamp of TFF criteria"},"content":{"rendered":"\n<p>Publication Date: Friday, 20 November 2020<br><em>This article originally appeared in <a href=\"https:\/\/www.mpamagazine.com.au\/sections\/market-talk\/nonbanks-urge-revamp-of-tff-criteria-274291.aspx\">Mortgage Professional Australia<\/a><\/em><\/p>\n\n\n\n<p><\/p>\n\n\n\n<p>Non-bank lenders and recently licenced ADIs are urging the Reserve Bank of Australia to launch a review of the allocation criteria for its $200 billion Term Funding Facility, according to a report by&nbsp;<em>Banking Day<\/em>. Non-banks argue that the TFF has tilted residential mortgage flows in favour of major banks.<\/p>\n\n\n\n<p>Under the TFF\u2019s rules, all APRA-licenced deposit-takers can draw down up to 5% of their loan books,&nbsp;<em>Banking Day<\/em>&nbsp;reported. That means most of the funding goes to Australia\u2019s largest banks: ANZ, Westpac, NAB and CBA.<\/p>\n\n\n\n<p>\u201cThere is an uneven playing field between banks and non-banks in relation to the pricing of financial support provided through the TFF,\u201d Adam Moore, director and head of securitisation at Brighten Home Loans, told<em>&nbsp;MPA<\/em>. \u201cThe non-bank market makes up an increasingly significant percentage of the residential mortgage market in Australia, and to continue to encourage competition, we believe TFF support should be extended to non-banks. The current disproportionate measures risk pricing non-bank lenders out of certain product segments, which in the long run will be a low for the end borrower in terms of choice and flexibility.\u201d<\/p>\n\n\n\n<p>Non-bank lenders are seeking meetings with federal government ministers and Treasury officials to push for a reworking of the TFF allocation rules,&nbsp;<em>Banking Day<\/em>&nbsp;reported. Non-banks say the major banks are \u201cweaponizing\u201d the TFF against their businesses.<\/p>\n\n\n\n<p>During an online conference held Tuesday by the Australian Securitisation Forum, RBA assistant governor Chris Kent defended the TFF,&nbsp;<em>Banking Day<\/em>&nbsp;reported. Kent said the amount of funding under the TFF was \u201cmodest\u201d and only had an impact \u201cat the margin.\u201d<\/p>\n\n\n\n<p>\u201cThere has always been a gap in the funding costs for ADIs and non-ADIs,\u201d Kent said. \u201cI don\u2019t think the gap has opened up as a result of our actions.\u201d<\/p>\n\n\n\n<p>James Austin, chief financial officer of Firstmac, disagreed.<\/p>\n\n\n\n<p>\u201cWe are confident the RBA, on reflection, would concur with our observations,\u201d Austin told&nbsp;<em>Banking Day<\/em>. \u201cThe banks have used TFF funding to offer large cash-backs to consumers switching home loans, but are only offering this on fixed-rate loans where the borrower is locked in for the equivalent period of the subsidised TFF funding. These offers are not applicable to variable-rate loans and banks have not passed on any of the savings in terms if cheaper variable-rate loans.\u201d<\/p>\n\n\n\n<p>Austin also told&nbsp;<em>Banking Day<\/em>&nbsp;that the impact of the TFF was far from \u201cmarginal.\u201d He said that Firstmac expected to lose one-third of its home-loan book to the major banks if the allocation criteria were not changed.<\/p>\n\n\n\n<p>Moore agreed that the criteria needed to be changed.<\/p>\n\n\n\n<p>\u201cWe would like the counterparty eligibility criteria to be extended to allow TFF support to be extended on a proportional basis to non-banks,\u201d he told&nbsp;<em>MPA.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Non-bank lenders and recently licenced ADIs are urging the Reserve Bank of Australia to launch a review of the allocation criteria for its $200 billion Term Funding Facility, according to a report by Banking Day. Non-banks argue that the TFF has tilted residential mortgage flows in favour of major banks.<\/p>\n","protected":false},"author":1,"featured_media":5537,"menu_order":0,"template":"","meta":{"_acf_changed":false},"categories":[26],"tags":[],"class_list":["post-6167","media-centre","type-media-centre","status-publish","has-post-thumbnail","hentry","category-26"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v23.8 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Non-banks urge revamp of TFF criteria | Brighten<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/brighten.com.au\/media-centre\/non-banks-urge-revamp-of-tff-criteria\/\" \/>\n<meta property=\"og:locale\" content=\"zh_TW\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Non-banks urge revamp of TFF criteria | Brighten\" \/>\n<meta property=\"og:description\" content=\"Non-bank lenders and recently licenced ADIs are urging the Reserve Bank of Australia to launch a review of the allocation criteria for its $200 billion Term Funding Facility, according to a report by Banking Day. 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