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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.”

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  • nick king 5th August 2010 at 11:58 pm

    I am with a netwrk writing mortgage and general insurance.I have been ill and had perfect credit before illness and recession.they have asked for cred.report/assetts liabilities and I know late payments/defaults may show.I have no complaints but fear fsa s recent fit and proper re finances may make me lose my job

  • Mel Samuels 26th May 2010 at 2:11 pm

    Check out the FSA application for approved individuals instead of reacting to a ‘throw away’ comment designed to cause panic. The criteria revolves around bankruptcy, disqualified directors and CCJ’s, even then the objective of the FSA is not to blanket reject applications unless there are serious misdemeanors. They do not undertake credit checks but can undertake CRB’s. Stop ranting about something you haven’t researched just so you can yet again blame the regulator for your own shortcomings.

  • The Mackster 24th May 2010 at 2:18 pm

    Three guys I know of got completely wiped out by the failure of a network; suffered repossession of homes, endless ccjs, defaults etc. Never, had a complaint, always gave good advice great a loss to the industry as a whole. However, if they had nearly brought the country to its knees, virtually written off a bank, they would still be sitting pretty with a few million in the bank and probably pop up somewhere in a couple of years as the head of a new mortgage network…

  • Andrew McGann 24th May 2010 at 1:20 pm

    I think we are getting a little hystrerical and paranoid here on the back of one rash comment by someone who should know better. I would concentrate on writing good quality business because good businesses will survive ( weaker ones won’t) and no amount of complaining will change that

  • Dazed and Confused 24th May 2010 at 11:13 am

    Well…what an interesting turn around this is from the FSA!

    I a the principle of a small Mortgage and GI Brokerage.

    Fact: Four years ago one of my brokers suffered a nervous breakdown, and in the time he was off work got behind on Credit Card Bills and Mortgage. He eventually had little or no choice but to take the route of Bankruptcy.

    Fact: I phoned our support network for their take on whether or not my consultant would still be able to trade. Their opinion was that ‘as you do not handle any substantive policies, and as you do not as a practice handle client money, there should be no reason, but to be on the safe side clarify it with the FSA.

    Fact: Phone call to the FSA Helpline…after contacting the appropriate person who could make a decision, the comment came back ‘as you do not handle substantive policies, you do not hold client money and the consultant has never had a complaint against him, there is no reason why he should not continue to trade as a Mortgage and GI Broker. Naturally though you should monitor his business types and levels and if any type of business becomes dominant in his business spread, it will need close examination.’

    So…it seems that in the FSA’s eyes it is perfectly OK to be Bankrupt, but not to miss a credit card payment…OK, I can see that!

  • gary brooks 22nd May 2010 at 3:07 pm

    As a combined Mortgage And Di brokerage, the only thing likely to cause a blip in my credit file will of course be caused by the onerous levy the FSCS are making on us at the moment, the £2000 they want off me this year is so ridiculously disproportionately high compared to the risk my business brings the industry that I will have no option but to relinquish the Investment side and join the growing band of Mortgage brokers who pay no large fees to either the FSCS or anyone else for that matter .!! Thus avoiding any credit blip !

  • O'Leary 22nd May 2010 at 11:05 am

    Let us hope that they apply the same criteria and standards to their own staff.
    If they do I wonder how many of them will still be employable after an assesment???

  • Ancient Wisdom 22nd May 2010 at 10:19 am

    ..the FSA will never cease to amaze.

    the FSA allow executives at banks to get away with bringing the collapse of banks and walk freely, yet punish hard working advisers.

    Networks collapsing, directors walking away with millions and their livelihoods in tact, and advisers losing commissions in the worst recession, after months of hard work – no wonder they fall behind with payments.

    Its a stab in the back, with the twists of the knives.

    every day, I question my ability to continue in this industry, knowing I have helped people buy their homes, get independent advice without thinking of ‘targets’ and reading constantly of poorly advised bank customers.

    This all stinks.

  • Michael B Gillis 21st May 2010 at 10:05 pm

    Of course. We, as FSA authorised individuals, should demand the right to investigate the credit files of all FSA employed executives/personnel/staff etc to ensure that they have a perfect credit history, otherwise we demand their removal from working for the FSA as they are not fit and proper to do so.

  • Dale 21st May 2010 at 8:34 pm

    Mr Cameronwill sort it before it happens – lets hope voting blue means the end to the FSA!

  • henry evans 21st May 2010 at 8:12 pm

    Perhaps before the FSA take any steps to further reduce the number of mortgage brokers, penalising them because of minor indiscretions, possibly created through no fault of the broker they should look at themselves. Are there any staff at the FSA with a poor credit rating who might be involved in directing the rest of us in all we do? Of course. I worked for a clearing bank for 27 years. Are the FSA going to get rid of those thousands of staff members with missed paayments? FSA, you have graeter problems, mostly of your own making, to attend to if you are to survive.

  • Peter Gladdy 21st May 2010 at 5:43 pm

    Whilst I have the greatest respect for Robert and all at AMI this suggestion is complete overkill. The FSA have always asked questions regarding previous credit history and criminal convictions, including drink driving, as part of their Approved Persons process but each case is treated entirely on its own merit, i.e. what is important is not the fact that someone has a CCJ but the circumstances in which it occurred and how it was then dealt with one the judgement was made. Providing that intermediaries are honest in their applications and provide the FSA with all the facts then they should have nothing what so ever to fear. lets not blow these things out of proportion.

  • Mark Hayman 21st May 2010 at 5:08 pm

    I think this is just another way to diminish the broker market further. Having just been through the worst recession in my lifetime why should mortgage brokers be treated any differently to any other industry with regards to their own finances…Would you stop a Dentist from treating his patients because he didn’t brush his teeth twice a day or to bring it back to the case at hand why should brokers be financially better off in these difficult times than any one else, especially if they are self employed? How also are they going to treat those poor network members who have had their commission withheld by failing networks and as a result struggled to meet their own financial commitments through no fault of their own.

  • Dave Espin 21st May 2010 at 5:06 pm

    We know the FSA apply a sledgehammer to crack a nut.

    Very little of what they do is ever proportional to the risk or takes any realistic consideration of the cost.

    A full-blown approval process is not needed to keep track of advisers – a simple list would solve the problem! An addendum to the FSA Register could list the adviser’s details, qualifications and where he works. If he moves, each firm would be responsible for notifying the FSA (subject to a fine if they don’t do it).

    The cost in both time and money for firms to go through a full authorisation process as a Controlling Function for MGI sales is overkill.

    Why don’t they try this method first. If it is not successful, then the full regime could be introduced later (by which time, hopefully, the FSA will have been replaced!)

  • Maurice Edgington 21st May 2010 at 4:42 pm

    I would not like to think that what has been suggested is really in the minds of the FSA. I would expect the FSA to want to know about serious issues relating to individuals that could be masked in the current system. I cannot see the FSA taking up credit searches on evey person in the industry…that is a crazy idea. Lets be positive for once. The regulator has made mistakes but it may be right to have the roles of individuals made clear and criminals or dubious people barred or excluded.

  • Philip Curnow 21st May 2010 at 4:39 pm

    Well . . . being fairly heavy handed with regulations could have a positive effect. But it needs to be right accross the board. Therefore, any staff member at all working for the FSA should be fired who has any slight connection with any company who has given bad advice . . . and the banks of course, anbody working in ANY sector of financial services should be sacked for the slightest financial indescretion, however many years ago it was . . . same goes for Solicitors and Accountants of course . . . plus our Politicans (Local and Central Government) . . . AND perhaps any civil servants as well . . . so that should leave about two people in the country working vaguely in “Finance” . . . honestly, how silly can you get – and how far do you take it ?

  • Matthew Gamble 21st May 2010 at 4:26 pm

    That would be rich, the FSA banning brokers who have had a minor blip on their credit commitments, when it was the brokers who needed help from the FSA in getting paid. What were they doing when there was uproar about Networks failing to meet their commitments, they just put their heads in the sand with Network Data, Mortgage Times, and nearly recently HOC.

    They are so out of touch with the real world is beggers belief.