Up to 10 firms in queue to clear lengthy FSA process
Share
Up to 10 would-be mortgage lenders are waiting to receive their Financial Services Authority authorisation, Mortgage Strategy can reveal.
A Freedom of Information request to the regulator shows 10 applications were made to it in the past 12 months.
The FSA claims it has not turned down any applications in this period.
Last week the regulator was criticised for taking too long to authorise firms.
At the Council of Mortgage Lenders’ Mortgage Industry Conference and Exhibition, Paul Smee, director-general of the CML, told delegates there is an argument for introducing a system where new lenders are monitored more closely in the beginning rather than waiting for months or years to be authorised.
He says: “If you want to meet someone who looks harassed and wan, find someone who is going through the FSA authorisation process.
“Of course, there has to be due diligence and the process has to be rigorous, but I’m not sure rigour necessarily equals protracted. I get the impression that protracted is the term those who have been through the process would use to describe it.”
He adds: “I think there is an argument for the FSA authorising firms quicker and saying it will monitor them more closely in the first few months, in a similar way to how drivers can use a ’P’ plate when they first pass their test.”
Sheila Nicoll, director of conduct policy at the FSA, says: “There is no doubt we have toughened up our authorisation process because it is more appropriate for us to keep firms out at the point of entry rather than having to take action against them once they have entered the market.
“I am not conscious of swathes of people wanting to come into the mortgage market at the moment, but I am aware that this is one of those areas where we have to strike a careful balance between competition and risk.”
If you enjoyed this article, sign up here to receive daily email updates from Mortgage Strategy and Follow @mortgagestrat
