The project centres on a new broker register that will track intermediaries whose behaviour crosses a defined line into serious non-compliance.
Industry insiders say growing misconduct in mortgage distribution is undermining trust in the lending system.
Behind the scenes, the Australian Financial Crimes Exchange is leading the work, co-ordinating intelligence and investigations across the major lenders and tax authorities. The group is in the advanced stages of creating a dedicated broker portal designed to record those who hit a specific threshold of dodgy or non-compliant behaviour.
Once live, the system is expected to give participating institutions a shared view of high-risk brokers rather than each bank working in isolation. Developers are also exploring options to expand the database later to cover bank employees who engage in wrongful conduct.
Fraud concerns are not theoretical. The five biggest banks are currently wrestling with more than $4 billion in suspected mortgage fraud sitting in their home loan books.
Much of the worry centres on falsified income, misrepresented expenses and manipulated documentation used to secure loans that might otherwise be declined. By pooling data through the Australian Financial Crimes Exchange, banks and regulators aim to spot patterns earlier, such as brokers repeatedly linked to problematic applications.
Supporters argue that a central register helps distinguish honest brokers from a minority whose behaviour repeatedly triggers compliance alarms.
The planned portal shows the financial sector is shifting from case-by-case enforcement towards shared infrastructure for monitoring risk across the market. Industry bodies frame the initiative as a way to protect consumers and strengthen the integrity of mortgage lending, not just to police intermediaries.
A central list of repeat offenders is likely to become a key tool for regulators and lenders deciding who they want to deal with. For now, though, the unanswered questions are how high the non-compliance threshold will be set and how brokers flagged on the register might challenge or correct the record.
