First NAB broke up with the other major banks, and now....

it seems all the banks have broken up with the Reserve Bank.

We've all been put on notice (in case you hadn't worked it out) that no longer will interest rates move when the Reserve Bank says they should. In fact the cash rate that the RBA sets is likely to become increasingly irrelevant, especially to you and me.

Not long ago, just a couple of years, there was NO difference in standard variable rates between the banks (well, maybe 0.1%). Now they're all moving in different directions.

Which is, frankly, an excellent reason to use a mortgage broker. How else are you going to know who's doing what? You could surf the net for a weekend - or have a life! Trust me, it's very very difficult to find what you're looking for on a bank's website. We should know - that's what we spend many hours each week doing!

When combined with Credit Licensing (meaning that brokers are now licensed by ASIC) brokers suddenly find themselves more relevant than ever. If you know someone who is thinking of taking out a loan, they should speak to a professional - and we'd be happy to help! Please refer them to us and we will take good care of them.

(If you didn't know about credit licensing, you should, as anyone you deal in obtaining credit - even Harvey Norman's interest free terms - has to be licensed. Find out more here: http://www.asic.gov.au/asic/asic.nsf/byheadline/Credit+regulation+-+background?openDocument )

In an alternate universe...

banking deregulation didn't happen and the government controls the interest rates charged by all banks. The variable rate is 8.5% in 2012.

There are no basic variable loans, no lines of credit, investment loans cost more and you need to book an appointment with your bank manager three months in advance.

This is because there is no competition, since all banks charge the same rate. Why try to be different?

In this, our actual universe, the government has no say at all in what the banks do with their interest rates. It's a double edged sword of course; if banking hadn't been deregulated in the '80s, there wouldn't have been the type of innovation that has driven the Australian mortgage market to be one of the most sophisticated in the world.

With deregulation, though, we are somewhat at the mercy of the banks' bottom line. (How many times do we need to say it? The only way to win with a bank is to be a shareholder, as that is clearly where their focus lies.)

Sorry but in this universe, the government can only use the media to try to shame them into 'doing the right thing' by their borrower customers.

Of course, doing the right thing for these customers is a completely different animal from doing the right thing by investor customers and/or shareholders.

And, at the end of the day, the interest rate is important but it's not the only thing. (If you don't get this, come see us......)

Why isn't this on the front page?

Just what every bank customer should know about.
http://www.smh.com.au/business/protecting-the-profit-margins-20120130-1qpre.html