Missed credit card payment could hinder FSA authorisation

The Association of Mortgage Intermediaries has warned that if the Financial Services Authority adopts a retrospective authorisation process for approved persons it could result in brokers not gaining authorisation because of minor credit blips.

AMI has published its response to the FSA’s consultation paper on the ‘Mortgage Market Review: Arrears and Approved Persons today.

Robert Sinclair, director of AMI, says it has consistently argued for the introduction of an individual register for the mortgage industry. But he says: “We are concerned at the potential impact on intermediaries if FSA was to adopt a full retrospective authorisation process.

“We do not think this should be used as an opportunity to reassess all individuals’ fitness and propriety to continue to operate in the mortgage industry. There is a danger that the assessment could exclude anyone with even a relatively minor blip in their credit history, such as a missed credit card payment.

“As mortgage advisers are not holding client money, we recommend a more measured approach.”

AMI also wants to see any register applied equally across the industry and include all sales staff as well as intermediaries.

Sinclair says: “The register must also make clear exactly what each individual’s role is so consumers know who they are dealing with and what actions they are permitted to perform.”

He adds: “The regulator has identified a general market failure as justification for making these proposed changes. But it has not identified the specific failures that occurred and that would have been prevented had the proposed authorisation process been in place.  

’FSA should conduct further analysis to establish whether full authorisation will achieve the desired outcome.”