If ever any one individual was going to have a go at Commissioner Ken Hayne’s sceptical conclusions from his Royal Commission into the banks et cetera, it is former ASIC chairman Greg Medcraft.

Medcraft is now comfortably ensconced in the 16th arrondissement in Paris as a senior executive in the Organisation for Economic Co-operation and Development, the OECD, from which he can comfortably lob small fireworks back to Australia in defence of his tenure from 2008 to 2017, most of that as chairman of ASIC.

He chose a recent interview in the Australian Financial Review with Monash University’s Professor Justin O’Brien to launch his first salvo, saying Commissioner Hayne’s recommendation to do away with commissions for mortgage brokers was “absolute rubbish”.

There were two odd aspects to his making that particular claim. One is that the mortgage broker commission issue has already been by far the most highly criticised of all the 76 recommendations that Hayne made, so Medcraft has come late to a noisy party.

Two, that issue is one of the remotest of the areas where he might choose to defend his record. He knows a lot about mortgages, since he used to specialise in bundling them together in a process called securitisation, but during his tenure he left the subject of broker commissions relatively untouched, preferring to focus mainly on lenders’ failure to check borrowers’ living expenses.

You probably don’t need reminding that Commissioner Hayne’s final report took  ASIC firmly to task for preferring closed door negotiation to full body contact courtroom action. Maybe Professor O’Brien buried the lead to the story but I’d have thought Medcraft’s response to Hayne’s criticism might have got a bit more air time.

Medcraft said that the retired judge’s recommendation that ASIC should litigate more and use enforceable undertakings less would not necessarily create the deterrence that regulators want, because the wheels of justice spin slowly.

“You have to look at this holistically because it is no use giving the regulator more penalty powers if the courts are not equipped to deliver timely and effective results,” he said.

“If you spend five to seven years in the courts, people forget why you took the case on initially.”

He didn’t say it but the textbook example of this was the Jodee Rich case, in which the founder of failed telco One.Tel won a civil case that was initiated in 2001, had its first hearing in September 2004 and its final hearing in 2007. Justice Robert Austin threw the case out in November 2009.

One.Tel tragics certainly remembered the case, which reportedly cost ASIC more than $40 million including Rich’s costs, and Medcraft has a point. ASIC filed the case while he was still working for French BankSoc Gen in New York, so he basically inherited a running sore, which ASIC just had to keep financing until the case reached its painful conclusion.

It not only preceded his tenure but also that of the previous chairman, Tony D’Aliosio, who chaired ASIC from 2007 to 2011, and it even preceded the appointment of the chairman before that, Adelaide accountant Geoff Lucy, in 2004.

The prize may have to go to David Knott, who chaired ASIC from 2001 to August 2003, and launched the case in December 2001. That’s five chairmen ago!

At least ASIC, which is now chaired by recovering investment banker James Shipton, has been given $400 million in the Budget to take more legal action against the banks.

But to come back to Medcraft’s “absolute rubbish” view of abolishing commissions, he’s certainly put himself in the position of making the sharpest criticism yet of any recommendation made by the highly respected retired judge.

Medcraft’s line is that it would be anti-competitive to abolish the commissions, since it would leave potential borrowers to shop around for the best mortgage rate on their own account, most likely without advice. There are mortgages and mortgages, particularly when it comes to interest-only payments and honeymoon rates, so it’s probable that ordinary punters could come unstuck in some way.

Surely there has to be some middle ground between what the judge recommended and Medcraft’s position? Neither man is short of grey matter.

They’re not even arguing the same point, anyway.

Commissioner Hayne didn’t like commissions because they are paid to the broker by the lender, most usually a bank, without the borrower being informed.

His schtick is transparency and there hasn’t been a lot of that in the sector. He’s not bananas about intermediaries, either.

He suggested it would be more transparent if it was the borrower who paid the lender, rather than the broker paying the lender, on the reasonable basis (I assume) that nothing focuses the average person’s mind so much as being asked to pay a bill.

As I say, Medcraft doesn’t want to see the banks getting it all their own way in lending, and of course the mortgage brokers have been howling blue murder at the possible extinction of their business.

How about making it very clear to the borrower that the bank is paying a commission to the broker, or a one-off fee, or whatever it is, and identify what that fee is?  If necessary, levy a charge of some sort on the borrower, perhaps (yet another) establishment fee, so they pay attention?

Whatever the future holds for the mortgage broking industry, if the industry adds value, it deserves to survive, if under more of a spotlight than it has been used to.

Clearly, if the borrower discovers that the fee being paid is more than the saving on a new mortgage being established, they’ll be less ready to use the services of a broker.

While the relentless campaign to stamp out commissions, particularly trailing commissions, is going to keep going, we will still have people such as stock brokers and insurance brokers, I’m sure, but on one firm condition.

They absolutely have to add value, and the people paying commissions have to understand what those commissions are, and why they are paying them.