View more on these topics

Do not trap lenders’ staff in the approved persons net, says CML


The Council of Mortgage Lenders has hit out at the Financial Services Authority’s plans to include all lenders’ staff in its approved persons regime.

In the latest issue of News & Views the CML says it supports the regulator’s plans to stop rogue individuals entering the mortgage market and track them to ensure they can’t operate elsewhere, but it doesn’t think this should apply to all staff at lenders.

The CML says: “In our view, there is a compelling case for greater regulatory scrutiny of the intermediary sector but the justification for the FSA proposal to include all lenders’ staff in its plans for an extended approved persons regime is less clear.”

In its response to the regulator’s proposals the CML argues that there are important differences between lenders and bro-ker firms, and it is not convinced that the FSA has recognised these.

Based on estimates it has collected from lenders it says some 14,500 people could be captured by the proposal.

And the CML says considering the number of brokers in the market, the FSA’s assessment that there will be 20,000 new approved persons seems a significant underestimate.

The trade body argues that lenders operate differing business models and processes, and provide mortgages through different sales channels.

It adds: “This means that the FSA’s assumption that its proposals can be applied uniformly across lenders and with a uniform result isflawed.

The likely outcome is that the FSA will dispro-portionately restrict or inhibit lenders with different business models irrespective of
the competence and integrity of their staff.”

But Robert Sinclair, director of the Association of Mortgage Intermediaries, says that while he understands the CML’s concerns about the added cost to lenders, if the approved persons regime is to be fair to consumers it must list all individuals in the market.

He says: “If we are going to have a register that consumers can use it should not only apply to half the industry or less. Whether a consumer is going direct to a lender or using a broker they should be able to see exactly who and what they are dealing with.”


Leader: Parties must get it together

If the first 24 hours of a hung parliament were anything to go by, with the endless prevaricating and lack of decision-making, we could be in for a bumpy ride. Jittery financial markets feed on this type of indecision so hopefully by the time you read this the Conservatives and Liberal Democrats will have done […]


News and expert analysis straight to your inbox

Sign up