Not because of the content necessarily, but because it shows that the FCA is intending to start as it means to go on by demonstrating that it has its eye on the ball.
It is quite right that caution should be exercised by all concerned but for the most part mutuals have fared well in providing the right product to the right people.
That said, while it is good to see that the FCA is taking a proactive interest in all aspects of lending, it is perhaps a good time to put a few markers down about the mutual sector before anyone gets the mistaken idea from reading the speech that some lending done in the mutual sector might be potentially irresponsible.
Woodall makes reference to niche lending categories and includes shared ownership. It’s worth remembering that the government has made it clear that it wishes to encourage this type of scheme and it has been part of mainstream offerings for some time.
The FCA will also not need reminding that the credit tightening at most mainstream lenders, with their reliance on scorecards on which to base decisions, has been in part responsible for excluding a large proportion of aspirational homebuyers. Building societies, adopting a human underwriting approach, are well placed to help this sector.
For any building society, one of the first principles of good governance is that we must satisfy ourselves that our underwriting standards not only satisfy outside regulatory requirements but because we are lending our members’ money we take this trust very seriously.
At Dudley Building Society, we have adopted a distribution strategy that involves careful selection of partners in the intermediary market, who share our values and attitude towards providing the best outcomes for our clients.
I am sure that my peers would be very willing to meet with Linda Woodall to clarify any ambiguity about the sector’s aims and values. In fact, we would all welcome it.
Jeremy Wood is chief executive of Dudley Building Society
