The call comes in response to the impending FSA review of the effectiveness of mortgage regulation. The CML has said that, in general, it has seen the transition from the Mortgage Code to FSA regulation as a successful one in operational terms but costs have greatly exceeded the original estimate and the jury is still out on whether the anticipated benefits have been achieved.
Michael Coogan, director-general of the CML, said: “Rules are still bedding down and it is too early to say whether the costs are outweighed by the benefits. Certainly the FSA’s work to date has shown some compliance patchiness. One question is whether this is partly because of the complexity of the rules themselves.”
“While we urge the FSA to be thorough in its analysis of the new regime, we also ask it not to make major changes in the short-term. All changes are costly to implement and must be subject to a comprehensive assessment of whether they would, in practice, deliver tangible benefits,” he added.
Stephen Bland, director of the small firms division at the FSA, said: “We will be looking at some of these costs and some of the benefits and will be asking, ‘does it still add up or do we need to tweak the regime?’”
Bland said the review, which would accept submissions from industry and consumer groups, was unlikely to lead to any significant changes to the mortgage rulebook: “We are getting a very strong message from industry that whatever you find, please don’t change anything because it really costs money to make changes.”
