The Association of Mortgage Intermediaries is slamming increasing regulatory fees for brokers.
The FCA today released its latest business plan and budget, including its draft fees for 2016/17.
An AMI statement says that most categories will see a 1.6 per cent fall in costs, but mortgages have an increased funding requirement of 8.7 per cent, leading to a net increase of 7.1 per cent.
Brokers and mortgage lenders in the A2 fee block are set to pay an extra 7.1 per cent on their 2015/16 levy to cover the costs of implementing the Mortgage Credit Directive.
The ‘home finance providers and administrators’ fee block paid £17.3m in 2015/16 but is due to pay £18.6m in 2016/17.
Brokers and lenders giving mortgage advice in the A18 fee block will also see a 7.1 per cent rise to cover MCD costs.
This group will see costs rise from £17m to £18.2m.
The AMI statement says: “This may not be quite as bad as it seems as the FCA is estimating a 10 per cent increase in firms’ declared income so the amount a firm will pay will fall by 2.3 per cent on a like-for-like basis.
“The mortgage industry does however keep paying for its success.”
AMI says that £3.1m has been added to the costs of mortgage lenders and brokers to supervise the second charge regime.
This means the total bill for lenders and brokers now stands at £36.8m.
AMI says it is still waiting for a breakdown from the regulator on the elements of the bill.
AMI chief executive Robert Sinclair says: “When the £200 annual fee for holding the consumer buy-to-let permission is added, plus the hidden FOS levy, together with £300 minimum annual fee for consumer credit – this makes the new bill for the smallest firms look increasingly expensive.
“What was £1,000 only two years ago can now be a staggering £1,619 for the same business.”
Sinclair says the trade body will continue to challenge the fee increases and demand answers about what the money is being spent on.
He says: “The mortgage industry has been hit with significant increases over previous years to pay for MMR and the implementation of MCD. Now that these are complete there is no respite as firms continue to be dogged with higher fees.
“The business plan makes no special play on mortgages but the costs continue to grow. No dividend for the investment in new regulation and no explanation on how the 8 per cent increase was calculated or justified to the FCA Board.”
The FCA is hiking its overall budget for 2016/17 by 8 per cent to £519.3m.
In total, banks and mortgage lenders are set to foot around £128m of the regulator’s costs for the year.
Nearly £50m (£49.6m) of the overall budget will come from FCA fines on financial firms.
Who is paying for the FCA’s budget in 2016/17?
Most of the costs stem from the FCA’s operating costs, or ongoing regulatory activity. This has gone up 5 per cent over the year from £479m last year to £502.9m.
Staff costs have gone from £279.9m to £316.8m, while enforcement costs have fallen from £10.7m to £8.3m.
Overall, the FCA says the increase in its budget has been driven by taking on responsibility for supervising the consumer credit market, as well as changes to accountability rules and the mortgage credit directive.
FCA acting chief executive Tracey McDermott says: “Over the next year we will continue to embed a sustainable approach to regulation in everything we do.
“The majority of our resources remain devoted to our core business and today we have set out the outcomes we want our work to achieve. Transparency is important to us, and this plan will give all stakeholders an understanding of our focus for the year ahead.”