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Duffy on Mortgages

The first full year of co-education has just finished for the FSA and the AMI. Let us look at the AMI&#39s report first.

“An excellent start to its first year. The AMI is a popular, intelligent and communicative member of the mortgage class and can develop further.”

Around 12,000 professional members and 30 associate member lenders speaks for itself. The AMI has made incredible progress since April 2004. Rather than becoming just another industry talking shop, it has actually got things done. Its triumvirate of Smee (now sadly moving on to a position where he can ensure all our proc fees seamlessly transit the banking system), Cummings and Stafford have shown themselves to be commercially canny and in their consultative dealings with the FSA have struck the perfect balance between persuasion and force. Their achievements and behaviour compared with the effectiveness of other professional/trade bodies are noteworthy.

Despite its infancy, what the AMI now has to do is consolidate its “Cabinet” position with the thankfully pragmatic David Kenmir and the FSA and begin to flex some of its muscle. I am talking in particular about championing its members&#39 interests on three key issues.

•Bringing some common sense to the Treating Customers Fairly charter, which is well-intentioned but naively flawed in places.

•Cautioning the country&#39s two foremost sourcing system operators that the intermediary sector is growing increasingly fatigued about the unconstructive handling of the key facts illustrations matter.

•Ensuring that the inevitable FSA enforcement process after N4 is as much about educating as punishing.

Let us turn to the FSA. Its own report reads: “For the most part, a willing and considerate listener who is unafraid to ask for guidance from juniors. Has strong organisational instincts and plans work well in advance. However, can be subject to manipulation by its master. Has a flair for art.”

My only real gripe with the FSA is really more a frustration with a Government which has presided over a litany of ill-conceived concepts from stakeholder pensions through to the Miles report (remember that?) John Tiner has a £500,000 a year package and is worth every penny of it, particularly when you contrast the moral and social responsibilities of his role with, say, those of his peer group in the private sector.

But there remains a deep-rooted consensus at grassroots level that:

•The MCCB did a fine and adequate job in self-regulating our industry.

•The Government&#39s nannyist intervention in all things consumer-orientated is overdone to the extent that two galling side-effects of regulation will be the resignation of some entirely compliant smaller practitioners from the industry on the grounds of operating costs and the puberty of a US-like compensation culture wherein the client is never wrong and the provider can always pay.

In many ways, the effectiveness of the FSA and AMI is interdependent. It will be fascinating to see how a former Conservative Cabinet minister (John Gummer) interacts with the FSA.

Edward Munch&#39s Scream has yet to be found. But if the FSA can constructively see us through the next 12 months without too much anxiety, the least we owe it is a replica to hang in its Canary Wharf reception. Hopefully, the picture&#39s image is not a harbinger of things to come.

Kevin Duffy is managing director of Hamptons International Mortgages


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