Building Societies' Association chairman and Skipton chief executive John Goodfellow has hit out at the FSA over mortgage regulation, saying it is totally unnecessary and will be regretted by the industry.
Speaking at the CML's annual conference on Tuesday with FSA chief executive John Tiner and chief financial ombudsman Walter Merricks, Goodfellow told delegates the industry is shooting itself in the foot with statutory regulation.
He said: “I think that regulation is unnecessary in the first place and we are going to regret this 20 years down the line.I think that the MCCB already works well.”
Goodfellow questioned whether statutory regulation would achieve what it is setting out to do, to make mortgages simpler for the consumer. He said the many pages of the key facts illustration make things more complex for the consumer, not easier.
He added said: “What I find amazing is that smoking, which kills, only requires a small notice on a cigarette pack. Mortgages, which do not kill, will be required to have many pages of KFI warning about them.”
FSA spokeswoman Kate Bristowe says: “The Government has decided to bring mortgages into the scope of the FSA. It has given us this task and it is our job to develop appropriate regulation tailored to the risks posed in the market.
“The KFI will ensure for the first time that consumers get clear information about the mortgage so they can more easily shop around and make a more informed decision.”
At the conference, chief ombudsman Merricks answered criticisms that ombudsman decisions have the effect of setting policy, which should be carried out by the FSA.
He pointed out that the ombudsman is duty-bound to decide individual cases if the FSA does not step in and said: “Another way of looking at the same issue is to ask whether the FSA should be setting policy across a broader territory so that the ombudsman would be obliged to make fewer decisions in a policy vacuum.”