In its annual report for 2010/11, the regulator noted that its approach to responsible lending has changed significantly, with rules protecting customers in arrears toughened up and further proposals to ensure “lenders get back to the basics of responsible lending”.
The FSA said: “In January we announced the publication of the 101st mortgage broker prohibition (96 of the 101 were mortgage fraudsters). We have also taken tough action in mortgage arrears cases where firms have not treated customers in arrears fairly and failed to give consumers the protection they deserve.
“There will be further action in this area in the coming year.”
In the past year, Kensington, DB Mortgages, Redstone Mortgages and Bridging Loans Ltd have received fines totalling millions of pounds for failings in relation to mortgage arrears handling and irresponsible lending.
All, except Bridging Loans Ltd, were also forced to pay customers redress.
Hector Sants, chief executive of the FSA, said: “Over the last year, we made progress towards implementing intensive supervision of conduct issues, both on a firm-specific and sector-wide basis. We have developed an approach to test firms’ business models and assess whether they pose any inherent risks to consumers and to assess the quality of the outcomes that consumers are receiving.
“We have completed our assessment programme for smaller firms and used the lessons learned from it to develop a revised supervisory approach that is more proportionate and risk-based.
“We recognise that there will always be instances where firms fail to treat their customers fairly and have therefore retained our focus on addressing these issues. In particular, we have been implementing our new power under the Financial Services Act 2010, to secure redress for consumers where there is evidence of widespread failings.”
In addition, Adair Turner, chairman of the FSA, said that the regulatory changes being implemented by the government will intensify its supervision further.
In particular, he highlighted its more aggressive approach to enforcement, the more intensive supervision of banks, greater protection of customers and willingness to intervene sooner, and developing new global standards for the prudential regulation of banks.
Turner said: “These four areas of particular focus – together with our continued work to ensure clean and efficient wholesale markets – would have shaped the FSA’s work over the last year, even in the absence of major structural change. But the reforms announced by the Chancellor last June, which will be implemented by 2013 once the legislation has passed, will facilitate the further intensification of these changes.”
