RBA account switching scheme

The Federal Government's exit fee rescue package for struggling mortgage holders is drowning in a sea of bureaucracy and may be delayed because of concerns of the RBA

Treasurer Wayne Swan will deliver the account-switching package on November 01.

The purpose of the package is to assist homeowners exit from their mortgage in an easier manner than current bank contracts allow.

Mr. Swan said he will give customers the ability" to vote with their feet"

The news comes as the banks blamed one another for the need to raise the increased cost of funds due to the global credit growth. This completes the round of rate increases commenced two weeks ago. The third progress report by the Australian Payments Clearing Association suggests there are concerns over the costs and timetable. A major change is to force financial institutions to release debit and credit transactions for the previous 13 months to give to a new lender.

Before proceeding, the Reserve Bank has asked for more information, as many institutions would not have the data available

Also some of the historical data necessary had not been maintained. In such a case the two financial institutions will have to communicate between themselves.

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Published on July 7-st, 2008 in Home Loans
Damon Rasheed is the CEO of Rate Detective, an Australian financial service comparison sites specialising in Life Insurance, Income Protection Insurance and home loans. Damon holds a Master's Degree in Economics from the University of Melbourne and has been involved in many start-up internet businesses.
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