The importance of responding

From Mike Davies

CP146 is living proof that there is value in responding to these consultation papers.

CP98, in practice, placed the onus for the supervision of mortgage advice and intermediaries who gave such advice, on lenders. Such an approach was unworkable, as lenders did not have any legal relationship with the intermediary that would enable them to apply sanctions.

We fed back our concerns to the Financial Services Authority last September. In December 2001, the Treasury announced that mortgage advice would become a regulated activity within the powers of the Financial Services Authority.

Bristol & West Mortgages welcomes the change of policy. The wide range of mortgage products and product features on the market means the consumer is very much in need of advice that meets a common regulatory benchmark for quality.

We also welcome other proposals in the document like recognising the nature of mortgage &#39shopping&#39 by allowing for quick quotes for the consumer &#39shopping around&#39 rather than a full financial review at each stop and permitting non-authorised introducers to introduce to any authorised firm and not just independent intermediaries. Many low-volume introducers introduce direct to the local branch of a lender, such as Bristol & West, whose service and judgement they trust; this would not have been permitted under the previous proposals.

A realistic timescale for implementation. The proposals will require firms to implement system and procedures to meet the regulator&#39s requirements. The cost of authorisation and the resources required to maintain compliance is, we believe, likely to lead to a reduction in the number of intermediaries, with an increase in the size of individual intermediary companies, the growth of networks and a move by many smaller, lower-volume intermediaries to introducer status. These changes will require time for implementation. We now have the minimum 12 months&#39 implementation period we asked for and this should also allow time for the marketplace itself to adjust. However, the revised pre-application illustration is still a weighty document and, we believe, could be daunting to the consumer. We look forward to continuing the consultation process on this document. In general, we believe that this is a well-balanced proposal and Bristol & West looks forward to continuing the dialogue with the FSA in the robust but constructive manner we have used since CP98 was launched in June 2001.

Mike Davies

Compliance manager

Bank of Ireland Mortgages