The Association of Mortgage Intermediaries says the FCA’s new competition objective could help brokers fight lender decisions to remove them from panels without good reason.
AMI is handling a number of cases of brokers who feel they have been unfairly removed from lenders’ panels without explanation.
AMI chief executive Robert Sinclair says the FCA’s competition objective, which allows the regulator to examine the market power held by providers, low switching rates, and why consumers do not buy certain financial products, could be used to help brokers challenge lender decisions to remove them from their panels.
He says: “As the FCA now has a competition objective it has the capacity to intervene where it feels lenders might not be allowing as competitive a market as might otherwise be possible.
“If some brokers are not able to offer some lenders’ products then it does affect competition. You can understand why someone might restrict distribution at the outset but when large lenders are removing brokers for arbitrary reasons then it seems strange to me.”
London & Country associate director of communications David Hollingworth says: “Until the competition powers are tested we do not know how they will be used to shape the market. It would be a big step to tell lenders how to distribute mortgages but there needs to be fairness for brokers.”