There cannot have been many in the industry who predicted Martin Wheatley’s shock dismissal from the FCA last week, despite some outrageous blunders from the regulator of late.
It was all the more telling that his sacking was accompanied by a statement from the Chancellor, George Osborne, who said the FCA needed “different” leadership, although some have said Wheatley’s hard treatment of the banks played a big part.
Within the mortgage market, there have been some good pieces of work by the FCA. The MMR was, largely, well executed. The over-interpretation of the rules was the fault of lenders, not of the regulator. Furthermore, the FCA’s interest-only and MMR thematic reviews were balanced and comprehensive.
But the regulator damaged its relationship with the industry over fees, which will rise by more than 8 per cent this year. During the consultation, the Association of Mortgage Intermediaries objected to not only the overall increase in costs but also the rise in the minimum fee, the scale of the fees for consumer credit authorisation and the fees for consumer buy-to-let.
Unfortunately, all of these objections were ignored and, at the time, Ami chief executive Robert Sinclair accused the FCA of evolving into a competition authority and lumbering the industry with the bill.
Then, of course, there were the blunders. The regulator recently admitted it had to write off £3.2m in unused software licences and there was the botched media briefing that sent insurers’ share prices tumbling. Admittedly, Wheatley was probably not directly responsible for all or any of these, but he headed the organisation and should shoulder responsibility.
The FCA needs to get its house in order and the priority for Wheatley’s successor must be to build trust with the industry.