The Finance brokers Association of Australia (FBAA) has called for standardised documentation around service level agreements to speed up loan discharges for borrowers wanting to change lenders.

FBAA managing director Peter White AM says brokers are increasingly reporting that banks are taking 14 to 30 days to finalise discharge documents, even after many approaches and requests.

“This appears to be an intentional ploy by the banks that I believe is based on them attempting to cushion their monthly bottom line but also to buy time so that their staff can continue to reach out to clients and try and retain them with incentives.”

He said banks must realise that they will pick up loans just like they lose them, and the more they delay and disadvantage customers the less likely those customers will ever return.

“I’d suggest that if a bank is experiencing a major outflow of loans then maybe they need to consider taking a look at their products and evaluating if they are meeting the needs of the borrowing marketplace.”

Decades ago it took around 30 minutes under a manual process to write up loan discharges and around three days for the entire process to be completed and Certificate of Title to be issued, according to the industry veteran.

The solution, Mr White explained, is to create better service level agreements which “in this day and age should be a no-brainer, as all requirements by lenders are largely the same.”

He says universal, standardised loan discharge agreements, loan application forms and privacy act forms should all be available in today’s marketplace.

“When we have platforms like PEXA creating universal e-settlements as well as the likes of Green ID and others, there are no real barriers to make these universal forms a reality.”