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We must influence course of regulation

Have you checked out the Financial Services Authority’s jargon-free ‘mortgages laid bare’ website yet?

It’s actually quite good. It’s easy to navigate and, as the name implies, explains some of the terms prospective mortgagors (didn’t find that one) are likely to come across.

Pity it didn’t go a bit further though. Explanations of further advances, offsets, LIBOR, equity release, buy-to-let, currency mortgages et al, would be useful. But credit where it’s due – it’s a step in the right direction even if the nakedness theme is a bit tacky. But then if Jamie Oliver can do it…

Of course, the FSA still isn’t everyone’s cup of tea. Lee Martin’s heartfelt pop at the frustrations of regulation – see Mortgage Strategy Letters, October 24 – must have struck a chord with everyone in the industry.

Isn’t there a touch of the emperor’s new clothes about regulation? Nobody wants to point the finger but the biggest impact of regulation has been the way it has increased costs, lengthened processes, added complexity and compounded confusion.

And, to borrow from another fairy tale, now that the regulatory genie is out of the bottle, there’s no way it’s going back in. We’re stuck with it. And there’s the rub. Because we’ve no choice other than to work with it, everyone seems to be scurrying around being an apologist for it. Or just putting a brave face on the fact that what was pre-sold as a light touch has turned out to be a heavy hand indeed.

But it’s still a work in progress and who better to influence change for the better than those of us struggling under its burden?

OK, we all sign up to protecting consumers. And consistency of format in the way financial products are offered and sold has been a big plus in theory. But the delivery of this new Gospel has been a disaster.

Far from simplifying the process, there’s now so much additional written information that nobody but a Which?-reading anorak has the time to read what’s produced? How does this help understanding? Ask me to identify the single most significant thing that regulation has accomplished and I’d be hard pressed not to say the decimation of the world’s rain forests.

I recently remortgaged and had 12 pages of paper to wade through – and that was with my own lender. But perhaps there’s hope yet. The FSA website is a good start. It’s short, meaningful and uses words even I can understand. If only the same luminary who commissioned it could do the same for lender processes and paperwork we might all be headed for a good outcome.

And perhaps that light ahead would be the light at the end of the tunnel rather than one on the front of the next regulatory train hurtling towards us.peter mounty


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