Just as there seemed little more that we could say on the subject of regulation, the ongoing plot has taken a surprise turn and a new chapter has been opened with the start of 2002.
Although many in the industry predicted the next move would be for the FSA to usher advisers under its regulatory belt, the timing was unexpected.
Whether this was a shock tactic used by the regulator’s PR team to ignite interest in the tedious debate on CP98, we’ll never know. We prefer to believe that the FSA wanted to begin the new year with a fresh start and hopefully a more sensible and workable approach to mortgage regulation.
The news has, in the main part, been welcomed. A deep sigh of relief can already be heard from lenders, having had the responsibility of making sure advisers stay compliant lifted from their reluctant shoulders. Advisers too are welcoming the fact that they will not have to waste time dealing with numerous compliance visits from lenders.
However, beneath this feeling of relief is a state of confusion. Advisers have been left wondering why there needs to be all-encompassing regulation. Why, they ask, should the majority have to pay for the mistakes of the foolish minority?
Lenders are also left to wonder whether the change in regime could herald the end of the dreaded pre-application illustration. This seems unlikely, but if any common sense has been knocked into the FSA, we should hopefully see a shorter and more consumer-friendly version.
The amount of money invested in order to come up with compliance aids in time for August this year has been phenomenal. Trading platforms, in particular, have invested heavily in the race to provide the best electronic solution.
Platforms are, however, putting on a brave face and insist that systems can adapt to any change the FSA throws at them. Now that they have until 2004 to prepare, there will be no room for excuses, so let’s keep our fingers crossed that the promises turn into reality.
Finally, let’s hope the FSA has made its new year’s resolution to think proposals through before offering them to the industry for consultation. That way there may be an outside chance that no more time and money will be wasted.