A Government-backed report written by a leading economist has slammed the
Treasury's decision not to regulate mortgage advice as a failure to protect
The report, issued this week by the Banking Services Consumer Codes Review
Group led by Bank of England economist DeAnne Julius, blasts the proposed
statutory framework for failing to plug regulatory gaps.
Stating that advice “sho-uld have been regulated”, the group is calling for the mortgage code to be str-engthened by November to try and patch over deficienci
es and is pushing for a full review once the FSA rules are finalised.
It also wants to ensure borrowers advised by brokers have the same level
of protection as those going direct to lenders by pushing for
intermediaries to come under the jurisdiction of the Financial Ombudsman
Service at N2 when the FSA gets its full powers.
But although the Mortgage Code Compliance Board welcomes – and proposed –
many of the recommendations, chief executive Luke March is ques- tioning
the proposal that firms should be given compliance ratings.
This would entail the MCCB having to brand firms with good, average and
bad ratings on the basis of its compliance visits but as the regulator has
14,000 brokers to oversee, March is dubious about the practical application
of implementing the recommendation.
Julius, speaking to Money Marketing, says: “The view of the group is that
advice should have been regulated.”
Treasury economic secretary Ruth Kelly says: “We take the Julius report
comments seriously and we will give them close attention.”