Birmingham Midshires Solutions welcomes FSA move
Birmingham Midshires Solutions, the specialist intermediary lender of the Halifax, has welcomed the Treasury’s announcement that the FSA is to regulate mortgage advice.
Although the proposed August 2002 implementation date for N3 has now been delayed, Birmingham Midshires Solutions believes that bringing all elements of the mortgage market under a single regulator will establish a regulatory system which both the industry and borrowers can be confident in.
Abbey National respond to announcement
Andrew Pople, Managing Director, Retail Banking, Abbey National said: "Abbey National welcomes the positive measures announced by the Treasury to benefit financial services customers. In particular, we are very pleased that removing the barriers to switching current accounts will remain a priority. We have been at the forefront of developing services to speed up switching and will be keen contributors to an industry plan to improve the end-to-end switching timescale. Abbey National expects to be a principal beneficiary of the easier switching of current accounts.
"In addition, we are delighted that the Treasury has listened to feedback from lenders as well as consumer bodies in deciding to extend the scope of mortgage regulation to cover advice. With this outcome, lenders should not be placed in the uncomfortable position of being responsible for the guidance provided by mortgage brokers. This is a move we have supported in the best interests of both the consumer and the industry. We will play an active part in consulting with the FSA regarding the implementation of its new responsibilities."
Luke March, chief excutive of the MCCB
"The Government’s decision at this time to bring mortgage advice and intermediaries under statutory regulation was unexpected, but we have welcomed the clear direction this now provides for the industry. The decision to move towards statutory regulation of mortgage advice and the intermediary sector has been facilitated by the Mortgage Board’s own work in establishing the first register of intermediary and lender firms active in the mortgage industry and its policy of enhancing standards, for example through the introduction of training and competence requirements (including compulsory professional qualifications for all mortgage advisers from 31 December 2002) and strict vetting of firms and individuals joining the register.
"The Board is pleased this work has been recognised by Ruth Kelly in her statement and in the report of the Banking Services Consumer Codes Review Group, chaired by Dr DeAnne Julius. Indeed our work in developing the Code and our registration rules to provide robust consumer protection and a complementary mix of non-statutory and statutory mortgage regulation has enabled the move towards a single regulatory structure for mortgages.
"The Mortgage Board will work closely with the FSA and the Treasury in ensuring that there is a smooth transition to the new regime and will input its own experience to ensure that maximum consumer benefit is achieved. Indeed we will wholeheartedly play our part in making the transition period as smooth as possible, and will work closely with the FSA and Treasury in ensuring the statutory regime delivers the right balance of consumer protection and regulation. In the interim period – which may be up to 2 years – we will ensure that the Code and our rules remain effective in ensuring consumer protection."
IFonline Trading Platform welcomes FSA announcement of supplementary regulation
IFonline, the independent mortgage trading platform welcomes the announcement from the FSA that both mortgage advice and general insurance broking will be regulated. There is an expectation that the treasury's decision to allow the FSA to regulate mortgage advice will provide a more logical and appropriate way of approaching mortgage regulation as a whole.
Nick Caplan, group chief operations Officer - IFonline Group said: "It is important to recognise these new areas of regulation as being in addition to those proposed in the CP98 consultation document, and the responsibility of implementation of CP98 still remains. These additional regimes tackle associated areas of the market, and will provide further confidence for consumers and brokers alike. With the increase in processing and compliance requirements, there is an expectation that technology will play an even more important role in offering sensible and cost effective solutions. The requirement for a flexible, central system is pivotal in the creation of a workable solution to N3 and the new regimes.
"IFonline has already developed a comprehensive set of compliance solutions based around both mortgage advice processes (current MCCB requirements) and the proposed CP98 document. We would anticipate that the additional regimes regulated by the FSA can be managed, utilising the same infrastructure reducing time and cost."
Virgin/Leeds & Holbeck/Nationwide/IMLA welcome news
Commenting on the announcement, Virgin One spokesman Scott Mowbray said: "We are pleased that the Government has decided to do the right thing by the mortgage industry and regulate mortgage advice given by intermediaries. This decision has been a long time coming but is undoubtedly the right way forward. There will of course now be a delay until the new system can be put in place and a need for further consultation, but everyone in the industry can live with that to get the best end solution for all concerned."
Tony Burdin, head of marketing at Leeds and Holbeck Building Society, said: "The Government’s change of mind over mortgage regulation is a welcome move. It heralds a true single regulatory regime for financial services under the FSA. We believe it will make life easier for both lenders and consumers.
Philip Williamson, chief excutive designate of Nationwide Building Society, said: "This is good news for consumers. It means they will be able to approach both lenders and intermediaries confident that all are required to meet the same high standards. Streamlining regulation is both logical and appropriate. It should also reduce costs and help to maintain strong levels of competition and innovation in the financial services sector.
"What we would really like to see coming out of the consultation process for mortgage regulation is a willingness on the part of the Treasury to promote CAT standards for mortgage products. The combination of a robust regulatory regime and CAT standard products would be an even bigger step forward for consumers."
John Heron, IMLA’s chairman, said: "We have found the FSA to be helpful and open to constructive diaglogue throughout this consultation process. It is very much to their credit that they have persuaded the Government to reverse their previous position and concentrate on the advice issue.
"Going forward the challenge will be to establish a regulatory framework for advice that protects consumers without reducing choice. Delivering this will rely on a measured approach to regulation, recognising the important role played by all intermediaries, one that allows firms who do a good job for their clients to thrive, rather than drown in a sea of bureaucracy."
