Mortgage News
FSA’s ‘intrusive’ approach should have been adopted earlier: CML
The Council of Mortgage Lenders (CML) has welcomed the FSA’s new intrusive approach to regulation, adding that many problems would have been avoided if the FSA had adopted this approach earlier.
In its latest News and Views issue, the CML said that the FSA is now an “intrusive, intensive regulator” in the mortgage arena but if it had focused in the past on errant firms in the way it intends to in the future, some of the problems would have been avoided.
Ahead of submitting its response to the Mortgage Market Review, the CML backed the enhanced stress-testing requirements imposed on firms and its more rigorous approvals processes for senior management but warned that the FSA faces significant challenges in the years to come.
Its response to the FSA’s Mortgage Market Review, which is due to be submitted at the end of this month, will show that it is not in favour of the status quo and recognises the need for change in the mortgage market.
Although the trade body is supportive of the plan to regulate second-charge lending and firms buying up existing mortgage books, it is less convinced that there is a compelling case to regulate the commercial buy-to-let market.
The CML added: “We do not need to rush to reform. We accept that further regulatory reform is inevitable, but we must not forget that the market has already adjusted irrevocably to correct many of the mistakes of the past.”
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The FSA is seeking comment from industry and consumer groups until 30 January. Any changes as a result of the review will be phased in from April 2010.
Also in the document, the CML warned that there is a real risk that a new Conservative government will subsume the FSA’s functions in other regulatory bodies.
In the statement, it said: “We are not convinced that this is the right approach bearing in mind the scale of work in responding to past systemic failures. It feels more like an unwelcome distraction.”