FSA proposals seem heavy-handed, says CML
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The Council of Mortgage Lenders says it is concerned about the regulator’s plans to extend the approved persons regime, saying that the proposals appear heavy-handed.
Earlier today the Financial Services Authority revealed plans to clamp down on arrears management and in particular crack down on the way firms charge borrowers in arrears.
The regulator also wants to extend the approved persons regime to mortgage brokers and those carrying out non-advised sales.
The CML says it broadly agrees with the measures on arrears handling but says that the extension of the approved persons regime may be disproportionate for lenders, with costs outweighing potential benefits.
The trade body says that lenders can offer more resources for struggling borrowers compared to the original salesman or adviser.
Michael Coogan, director-general of the CML, says: “We will need time to consider the FSA’s proposals properly.
“But at first glance, the extension of the approved persons regime to both lenders and intermediaries appears heavy-handed, at least as far as lenders are concerned, and may be a sledgehammer to crack a nut.
“The number of sales advisers identified by the FSA also appears lower than we would expect, suggesting that the FSA may be underestimating the cost of implementing this proposal both for the regulator and firms.”
On the arrears proposals, Coogan warns that the FSA’s cost/benefit analysis may end up costing more than the modest increase in costs the regulator has predicted.
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