Brokers: FCA needs strong Wheatley successor
Wheatley, who famously said he would “shoot first and ask questions later”, is understood to have been ousted by Chancellor George Osborne and he will stand down on 12 September.
Wheatley has been in charge of the regulator for four years, in which time he oversaw the introduction of the Mortgage Market Review in April 2014.
Matthew-Fleming Duffy, mortgage and finance broker at Cherry Finance in Bournemouth, said: “He’s a marmite character; you love him or loathe him.
“If you think what he inherited from his predecessors the FCA has sharpened its teeth a bit but it has driven up standards.
“You can’t make an omelette without breaking eggs. He’s dealing with people at boardroom level and to do that you’ve got to be that kind of character.
“The FCA has got a difficult job; they are doing a decent job in a very changing marketplace.”
Richard Hanlon, principal at Mortgage Planners in Dundee, agreed that the new man or woman in charge needs clout.
He said: “I would like somebody at the FCA that’s got a bit of backbone and is prepared to say “this is what we’re doing, this is why we’re doing it and it’s fair across the board” and then to listen to all parties.
“We need strong individuals to stand up to the government.”
But far from fighting the financial services corner against the government, Alan Lakey, director of CIExpert, reckoned the resignation proved that the regulator isn’t as independent as it seems.
It was said to come about after Osborne said he wouldn’t renew his board contract with the FCA.
Lakey doesn’t hold up much hope for Wheatley’s successor.
He said: “His successor will be like him: a bureaucrat.
“We’ll have someone making decisions who doesn’t understand what’s going on but we’ll be prey to political intrigue.
“To say I’m underwhelmed is probably an understatement.”
Mortgage Market Review
Part of Wheatley’s legacy was the development and introduction of the MMR last year, which introduced stringent stress tests in the residential lending market.
Richard Hanlon mocked the FCA for its introduction of the MMR, calling it the Business Prevention Authority.
He said: “In theory MMR is a good thing but in practice it’s really difficult to work around.
“The rules are not clear and there’s little consistency from lenders in how they interpret them.
“The FCA needs to put forward further guidelines and the same formula should be applied to every lender.”
Fleming-Duffy has mixed feelings about the MMR.
He said: “It has had a positive effect on the market in theory but it still needs to evolve in terms of how lenders interpret the rules.
“Wheatley has been the right guy to lead them through those changes, but it may help to get some fresh blood in to look at the market with a fresh view.”
In the years ahead Fleming-Duffy said the MMR should be scaled back in scope, adding that the regulator should focus on tightening up unsecured lending like credit cards and personal loans rather than the mortgage market.
He said: “The pendulum has swung too far with affordability restrictions. In my 25 years in financial services I’ve never seen it harder to get a mortgage.
“Maybe the “shoot first ask questions later” policy has made banks paranoid about lending outside their policies.”
He added: “People are generally more responsible with a mortgage than consumer credit like credit cards.
“You pay roughly the same amount on a mortgage as rent over a 25 year period and you have the security of the property.
“There are the bigger problems in society than homeownership.”