The Financial Services Consumer Panel says not giving the Prudential Regulation Authority a duty to consider its representations leaves a serious gap in the regulator’s accountability.
Currently the FSA has a duty to consider what the panel says. Under the new regulatory set up that duty will apply to the Financial Conduct Authority but not the PRA.
Consumer Panel chair Adam Phillips says the consumer perspective could be lost when the PRA is considering matters such as mortgage interest caps or the distribution of funds in with-profits funds.
He says: “We want the panel to be given the same rights with regard to the PRA as it currently has with the FSA. We are concerned that the consumer perspective will be ignored when the PRA is considering issues such as mortgage regulation or with profits funds.
“It is widely acknowledged that a formal statutory relationship with the Panel has been of great benefit to the FSA. A similar relationship with the PRA would ensure consumer interests are taken into account in the new authority.”
The Treasury is expected to publish the financial services bill which sets out in detail how the new regulators will work by the end of this month.