A year after the introduction of statutory FSA mortgage regulation, the CML argues that the costs of regulation have greatly exceeded original estimates.
It also says has doubts as to whether the anticipated benefits of regulation have been achieved yet.
With transitional costs estimated to be about double the FSA’s original expectations, this raises a question as to whether the costs of regulation are proportionate to the benefits when put into practise.
The CML says this is an additional reason for the FSA to scrutinise whether or not the consumer is better off under the new rules.
CML director general Michael Coogan says:
“A year after the introduction of mortgage regulation, the rules are still bedding down and it is still too early to say whether the costs are outweighed by the benefits. Certainly, the FSA’s work to date has shown some compliance patchiness – one question is whether this is partly because of the complexity of the rules themselves.
“While we urge the FSA to be thorough in its analysis of the new regime, we also ask them not to make major changes in the short-term. All changes are costly to implement, and must be subject to a comprehensive assessment of whether they would, in practice, deliver tangible benefits.”