Move to force cheaper home loans
AUSTRALIANS are being promised cheaper home loans and bigger returns on savings under a Federal Government plan to allow more lenders to call themselves a bank.
Treasurer Scott Morrison will today reveal he wants to dilute the power of the big four banks by removing laws that require lenders to have more than $ 50 million capital. He said lenders faced a significant obstacle by not legally being able to call themselves banks.
His plan mirrors the UK where, after it was made easier for lenders to compete, 56 new banks entered the market.
Many were online lenders that could offer cut- price rates due to lower overheads.
“The Turnbull Government wants to bring greater competition to the banking sector,’’ Mr Morrison said. “Allowing more lenders to be called banks will mean better access to cheaper loans and more generous deposit rates.’’
Mr Morrison will today release draft legislation for public consultation.