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CML calls on FSA to delay statutory regulation date

The Council of Mortgage Lenders is urging the FSA to postpone the implementation date for statutory regulation amid fears that compliance technology cannot be developed in time.

CML senior policy adviser Kate Main says the regulator must delay N3 – scheduled for next August – because she believes lenders cannot put compliant IT solutions in place in time for the deadline.

She says that as FSA rules will not be known until the end of the year, lenders will only have a maximum of eight months to commission, design, test and roll out sophisticated IT systems.

As the deadline is so tight, Main says there is a danger that lenders will fail to comply as their technology will not be advanced enough to cope with the demands of the new rules.

Her comments follow a Marlborough Stirling-commissioned survey on mortgage regulation which found just 7 per cent of lenders have the technology to comply with FSA monitoring requirements.

Main says: “Lenders have less than eight months to develop some very sophisticated IT systems. This is a huge task and is why we – and many lenders – are urging the FSA to postpone the date for the new rules until IT solutions are much further developed.”

Halifax mortgage regul-ation manager Celia Rowland says: “There is a massive risk to the industry that if lenders wait for the final rules then it will be incredibly difficult to meet the deadline. N3 needs to be delayed by six months.”

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