Currently the FSA cannot identify firms until their investigations have concluded.
However, a clause in the Financial Services Bill, which was introduced to Parliament last November in an attempt to protect financial stability by creating a Council for Financial Stability, may allow the regulator to name firms.
At the Treasury Select Committee in London, Jon Pain, managing director of supervision at the FSA, said: “If those provisions were adopted, that would change the process at the stage at which a firm would be identified as part of that enforcement process.”
However, Michael Coogan, director general of the Council of Mortgage Lenders (CML), told the committee that it would be unfair to name firms in the investigation stage.
He said: “Innocent until proven guilty is still an important principle. I think it’s fair to the firms, in an environment where enforcement action can last for quite considerable time, that you don’t have uncertainty hanging over them by referring to them in public at one stage and having many months before a final decision is taken either way.”
The regulator has been carrying out investigations since last June into the way some firms such as specialist lenders and third party administrators have treated customers in arrears.
In October the FSA fined GMAC RFC £2.8m for serious failings in the way it treated borrowers in arrears and ordered it to pay up to £7.7m in redress to over 46,000 borrowers.
