At last, we now know the colour of the new Government, a sort of blue with a yellow tinge.
The electorate spoke – they wanted to get rid of Gordon, but they didn’t quite trust David enough to hold the purse strings.
What they wanted was a Conservative Government with a conscience. Step forward Nick Clegg and his team, AKA the Tory conscience
So what does this all mean for the mortgage industry and mortgage brokers in particular? Well the first question is what will happen to the FSA?
The Conservatives published a White Paper back in July 2009 which set out its plans for “sound banking”.
It included abolishing the Financial Services Authority and the tripartite system of Bank of England, FSA and Office of Fair Trading and instead give the Bank of England responsibility for maintaining financial stability.
This would give the Bank responsibility for the prudential regulation of all of our banks, building societies, and other significant financial institutions including insurance companies.
The Bank of England’s structure will need to be changed to reflect its new powers and responsibilities and will get ‘beefed up’ to take over a great deal of the responsibilities of the FSA.
The Bank of England will have the power to regulate the pay structures, riskiness, complexity and size of financial institutions. This sounds exciting stuff but what does it mean for the mortgage industry and mortgage brokers in particular?
With the Bank of England in charge of prudential regulation, the Conservatives said they were going to create a new ‘Consumer Protection Agency’.
If it still happens, and at the moment it’s a fairly big if, this would take on the responsibilities of protecting the consumer previously divided between the FSA and Office of Fair Trading.
This would be, in the words of the White Paper, “a single powerful body able to stand up for consumers and ensure they are treated fairly”.
It could yet turn out that it was ‘better the devil you know’ as the CPA would be more powerful than the FSA in this area and will focus on consumer protection.
The CPA would also have new powers to fine and name and shame institutions that break the rules or who receive a lot of consumer complaints.
On the face of it, it looks like a change of name but the same old story but with knobs on.
As far as the Liberal Democrats are concerned they are more extreme in the defense of the consumer than the Conservatives so I do not see the Governments conscience holding them back.
So the mortgage brokers out there should still be mindful of the FSA’s principle of “Treating Customers Fairly” as instead of going away it may be only be re-focused into the CPA’s Principle of “The Fair Treatment of Consumers”.
