Leading mortgage brokers and non-banks have thrown aside normal competitive pressures to join forces in a last stand against the government's impending ban on exit fees, which is set to come into force on 1 July.

In a move that makes good on the MFAA's promise not to give up the fight against the ban until the "fat lady sings", full page advertisements are running in today's Australian and Australian Financial Review newspapers, in a message that MFAA CEO Phil Naylor told Australian BrokerNews appeals to the "common sense" of Federal Senators, and also Treasurer Wayne Swan.

The campaign is supported by industry participants Aussie Home Loans, Australian First Mortgage, Smartline, Mortgage EZY, Loan Market, Mortgage Choice, AFG, National Mortgage Company and Better Mortgage Management, as well as the MFAA. The ads are headed "Exit fee ban will flatten smaller lenders and reduce competition".

The MFAA said that the ban is still set to be introduced on 1 July, despite protests from industry that the move will "annihilate" non-bank lenders which the MFAA said have been the drivers of competition through lower rates over two decades.

Naylor said the decision to run the campaign was because the Senate will commence sitting next week, for the first time since the release of the Senate Economics Committee's report on banking competition. The report recommended ASIC guidelines on exit fees be evaluated before any ban on exit fees was implemented, and that it should be either scrapped or scaled back for smaller lenders.

"We are basically striking while the iron's hot, and bringing this issue to the Senate's attention, that these recommendations were made, and that it is up to them to implement them, or influence the government to implement them," Naylor said.

"There is yet to be a government response to the Senate Committee report, but it should be noted that allowing the ASIC guidelines to operate, or exempting non-bank lenders, would both have the effect of promoting competition in mortgages by allowing non-bank lenders - the real competitive factor in mortgages - to operate in the best interest of consumers."