Trade bodies reject FCA’s call for eligibility and broker tools

Michael Lloyd

September 17, 2018

fca fee

Trade body representatives have dismissed the FCA’s Mortgage Marketstudy’s suggestion of making more tools for eligibility and broker assessment available.

Katie Davies, executive director at IMLA, challenged the FCA on both these points, arguing that consumers don’t want to, and don’t need to, be able to compare brokers.

She added: “One of the challenges was how do you know what consumers want?

“The message that came through is customers want to challenge their broker and want more information about how to compare one broker against another and our feeling was this is throwing an awful lot of information at consumers who wouldn’t know what to think of it all.

“And I don’t think people want to spend all that time trying to work out who their broker is. You should leave it to the market, and to brokers to sell themselves and persuade the consumers what they want.

“Consumers are a very big mix of people with different understandings of mortgages and different people looking for different things. They won’t all want to go to the same place to get the same information churned out. So I don’t think it will enhance the consumer experience.”

Jackie Bennett, director of mortgages at UK Finance, thought the FCA should leave both areas alone.

She said: “I think it was an area where all trade associations agreed in their responses so I think it’s really useful for the FCA to hear us speaking with a fairly single voice.

“So when just thinking about criteria and eligibility area, we think this is an area the regulator should leave alone.

“There’s a lot of innovation happening within the fintech area and within eligibility criteria. Our concern is if the regulator intervenes it stops some of that innovation in the sector right now and that’s not what we want to see.

“It’s a market for a reason and a free market for a reason and these things will develop.

“In terms of a broker assessment tool, intermediaries are a an extremely important part of a lender’s distribution network.

“It’s important whatever tool works for lenders, brokers and customers and it’s about how can you measure that quality in an independent objective way so in all these areas we think there’s a bit more thinking to be done.”

Paul Broadhead, head of mortgage policy at the BSA, criticised the FCA, saying they just wanted to find something to improve even if it wasn’t useful.

He said: “I think the FCA took two and a half years to do this study and found generally everything is working okay so they had to come up with something and they have, which is broker assessment tool and eligibility.

“With eligibility criteria, most consumers and brokers will know that borrower is eligible if it’s for a relatively straightforward vanilla loan. Where the eligibility is not black and white is where the broker’s knowledge, experience and relationships with lenders is important.”

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