Sinclair: FCA £10m additional charge “a disgrace”
The Financial Conduct Authority’s (FCA) introduction of a £10m additional charge is “a disgrace,” according to Robert Sinclair (pictured), chief executive of Association of Mortgage Intermediaries (AMI).
AMI has challenged the FCA’s “shortest in memory” fees consultation period, which lasted five weeks in total.
The association has submitted its response to this year’s fees and levies consultation, expressing deep concern over the approach and design of the proposal.
Sinclair noted that the FCA, for the first time, had failed to publish its business plan to underpin the budget.
In addition, the proposals introduced a levy on networks which was not consulted on in the November policy proposals.
This created a backdated levy on some firms, which AMI said breaches all principles of fairness.
There is also a proposed significant increase to the minimum fee on consumer credit, where AMI’s members have no income.
Sinclair said: “We echo and support the significant issues raised by our colleagues at PIMFA who share our concerns on the sudden and unexplained additional fees on networks.
‘This £10m additional charge is a disgrace. The industry deserves a better explanation on why from this new FCA management team.
“The introduction of a new fee category (A22) is a change to the process of how the FCA introduces new fee policies and should have been included in the November policy paper with a full cost benefit analysis.
“This is a failure to follow proper process on the FCA’s part. Giving only a five week consultation window breaches the principles of good regulation.
“It is not inconceivable that current network models will be forced to change and that there could be a large migration of firms from AR to DA or leaving the market.
“In proposing these changes, the regulator must consider whether it would be comfortable with such a significant change to the mortgage intermediary sector structure and its ability to manage and control such a migration.
“The cumulative effect of the changes in FCA periodic fees and application fees; the new levy on principal firms for ARs and IARs; increases to FOS levies and case fees; the large increase in FSCS levies and the substantial increases of PII premiums exclusions and excesses; is having a profound effect on firms’ profitability and potentially their viability.
“These cumulative proposals display a lack of clarity, fairness and is undoubtedly misleading.”