Out in the open?

Something of a can of worms was opened last week when the Association of Mortgage Intermediaries (AMI) put pressure on the Financial Services Authority (FSA) to release the findings of its product data sales reports on lending activity. While the FSA maintains the data is commercially sensitive and was never intended for release, brokers have come out strongly in favour of the publication of the results. Lenders, however, are backing away from the argument.

The reports are completed by both lenders and brokers every six months and contain details on product sales and the level of business carried out in each area of the sector. Chris Cummings, director-general of AMI expressed his disappointment at the FSA’s decision not to release the findings. He says: “It has been my understanding that it was always the FSA’s intention to publish. The data gives an accurate and completely unbiased view of all the transactions in the market and the FSA, as our regulator, is in a unique position to provide this information. There are huge benefits to the consumer to have clear and impartial information. Not to publish the data is a lost opportunity and a disservice to the consumer.”

However, Robin Gordon-Walker, spokesman for the FSA, maintains the data is not being released. He says: “It is confidential information we cannot publish in its pure form. We do publish it in aggregate form in our Financial Risk Outlook each year and it is useful for analysing trends and informing how we regulate. It does become public, but not in a literal sense. It has never been our intention to publish the data.”

Enormous benefit

Brokers have voiced their disapproval of the FSA’s decision, backing Cummings’ call for the data to be published. Mark Chilton, managing director of Purely Mortgages, says: “I’m shocked that the FSA is not releasing the information. Why should the information be conceived to be commercially sensitive? Though a lot of the data comes from named sources, it doesn’t have to disclose these. The data would also be of enormous benefit to consumers to increase the message of the advantages of using mortgage intermediaries.”

The suggestion that the figures are being released through the Financial Risk Outlook has not been met positively. Thomas Reeh, chief executive at blackandwhite.co.uk, says: “It’s not frequent enough and it’s not in a format friendly to brokers. The FSA could do a lot better if it was a bit more open and transparent. The industry would benefit in sharing best practice.”

Andy Frankish, managing director for Mortgage Talk, also backed the advantages to business. He says: “It would be interesting to use the information constructively and the privacy issues could be overcome so that the useful parts of the information could be used. We would be able to see the trends within the market and if we’re showing a significant difference in our business to other companies, then we must ask why.”

Reservations and reasons

Cummings queries whether the FSA does not want to publish the data due to having reservations over the information it has received. “I don’t know why the FSA wouldn’t want to publish the findings, unless it’s been given inaccurate data. If it has, then what is it going to do about it? And if the FSA hasn’t got accurate data, then neither does the Council of Mortgage Lenders (CML), as they use the same source.”

Reeh sees the reason as more simple, adding: “The FSA doesn’t want to have its findings challenged. It would be horrified to find out its information is wrong. By not releasing it, it doesn’t have to show its hand. It’s like a one-sided poker game when the FSA should disclose information.”

Sensitivity issues

But while intermediaries wholeheartedly support AMI’s stance, lenders are being more careful. Bernard Clarke, spokesman for the CML, supports the FSA’s view that the data is too sensitive to be released. He comments: “We have to strike a balance between the commercially sensitive information and giving data on broader trends and market developments.”

Bob Sturges, director of communications for Money Partners, says: “There appears to be quite a gap between what AMI is expecting from the FSA and what the FSA is prepared to give. While I can see why the FSA couldn’t possibly release sensitive information relating to individual firms, it would be useful to understand where it has concerns or issues arising from the product sales data it collects. This, I’m sure, could be published in a form that benefits the industry while respecting commercial confidentiality.”

AMI has decided to return to the original consultation papers to see what the FSA publically agreed to. Cummings concludes: “The FSA undertook to publish this data and I sincerely hope for it to honour that commitment. If it doesn’t, then it should explain why.”