Revised estimate slashes broker sector costs by over 30%
The Mortgage & Finance Association of Australia (MFAA) has responded positively to the latest Compensation Scheme of Last Resort (CSLR) levy update, which shows a significant reduction in projected costs for the credit intermediary sector, including mortgage and finance brokers.
The updated financial year 2026 estimate from the CSLR reveals that the levy for credit intermediaries has been revised from $2.723 million in January to $1.833 million — a drop of more than 30%.
“It’s pleasing to see that the CSLR is expecting to receive fewer unpaid determinations for the broking sector,” said Naveen Ahluwalia (pictured), MFAA executive for policy and legal. “This is a clear sign that the broking sector continues to thrive, to produce good consumer outcomes with minimal complaints and minimal unpaid determinations.”
While the sector-wide levy estimate has decreased, the per-representative charge for credit representatives remains unchanged at $52.04, due to legislative factors. Ahluwalia added that any surplus generated from the revised figures would be credited toward future years.
Despite the downward revision, concerns remain over the potential impact of a special levy arising from the personal financial advice sector, which exceeded its $20 million cap.
“The revised estimate was needed because the personal financial advice sub-sector exceeded its $20 million cap,” Ahluwalia said. “The updated estimate still breaches the cap. The Minister for Financial Services must now decide how to fund the required $47.3 million special levy – including whether to spread it across all four sub-sectors or fund it in a different way.
“The broking sector accounted for minimal numbers of pre-CSLR claims determinations, as reflected in the revised estimate,” Ahluwalia said. “This should be taken into account when deciding how to fund the special levy.”
Calls for a more proportionate approach to funding have grown louder this week following new projections from the Australian Securities and Investments Commission (ASIC). The regulator’s latest Cost Recovery Implementation Statement (CRIS) indicates that the total levy for the credit intermediary sector will more than double — from $2.9 million in 2023–24 to $6.05 million in 2024–25.
The minimum levy for brokerages will rise to $1,000, plus $43 per credit representative, with ASIC attributing the increase to heightened regulatory oversight and enforcement activities across the mortgage broking industry.
In response, the MFAA earlier this week called for a “balanced and proportionate” approach to industry levies, warning that the combined impact of rising ASIC and CSLR costs could unfairly burden brokers who continue to demonstrate strong consumer outcomes and low complaint rates.
“We need a more sustainable funding model for the CSLR and look forward to the outcome of the Treasury review,” Ahluwalia said.
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