The CML says it supports appropriate action to prevent rogue individuals from entering the mortgage market and track their movements, but says the justification for the FSA’s proposals to impose the approved persons regime on the lending sector as well as the intermediary sector “is less clear”.
In its latest newsletter the CML says: “We argue that there are distinct differences between lender and intermediary firms. We are not convinced, however, that the FSA has recognised them – or the unintended consequences of the uniform introduction of new regulatory requirements for lenders and intermediaries.”
It says the FSA already has better regulatory tools to supervise lenders and that there is not a “significant lack of training or competence” in the lending sector.
The CML adds: “It is also likely that a significant number of individuals will be unintentionally captured. Based on estimates we have collected from the majority of active lenders, some 14,500 staff from lenders alone would be captured by the proposals.
“Considering the number of intermediaries, the FSA’s own assessment that there would be 20,000 new approved persons looks like a significant under-estimate.”
The CML is also concerned that the regime will be extremely costly and could derail the housing market recovery.
It says: “The risk is that the FSA’s proposals will distort the market, or delay its recovery.”