A review of the present ban on mortgage exit fees and setting a standard fee for wholesale funding guarantee for banks are included in the series of modifications caused by the Senate inquiry into competition in the Australian banking.

According to reports, the prohibition could lead to increased upfront fees and cut the competition with the sector.

The Senate economic references committee report stated that "The committee recommends that the government reconsider its decision to ban exit fees, before the amended regulations come into effect, with a view to allowing enough time for the effectiveness of the existing ban on unfair and unconscionable exit fees ... to be assessed. If it proceeds with the ban, it should only apply to authorized deposit-taking institutions."

The federal government announced plans to ban mortgage exit fees on new home loans from July 1, 2011, in a bid to boost competition among the big four banks.

The report also suggested that the Australian banking sector needed a wider independent inquiry instead of focusing just on competition.

"The Committee recommends that a broad ranging inquiry into the Australian financial system be established, modelled on that conducted by the Campbell Committee. The terms of reference should be broad, covering the role of banks and other financial institutions in a post-GFC financial environment, “said the report.

The Senate suggested that the Reserve Bank of Australia should publish more information on banks aside from regulation of early exit fees on mortgages and a requirement that banks disclose exit fees up-front in a simplified format.