Regulator shows its teeth

Analysing a range of prime and non-conforming firms’ performances concerning affordability, self-cert, training and competence, and the effectiveness of senior management, the FSA found several ‘Treating Customers Fairly’ (TCF) violations and management failings.

Stephen Bland, retail intermediary sector leader at the FSA, said: “During the reviews, we saw a number of good brokers who are meeting the required standards and they are being undermined by the negligence or wilful non-compliance of others.

"We also saw some who despite having some way to go, were willing to engage with us and be helped to improve their performance, which is why we are providing so much guidance following these reviews. However, there are still an unacceptable number of firms unwilling to change and they are damaging the industry.”

One of the FSA’s biggest concerns surrounded advisers proceeding down the self-cert route, despite issues over the ability of clients to afford the repayments and/or the legitimacy of the information provided.

As a result of the review, the FSA has published additional guidance on its website to help intermediaries comply with regulation.

Responding, Richard Farr, director of the Association of Mortgage Intermediaries, said: “We strongly support the work that the FSA is undertaking. However, it is important to note that many areas of strength were discovered during this review. It is crucial in such a turbulent market that we highlight positives and not just focus on a small minority of failings.”

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