Currently the FSA refuses to identify firms under investigation until after the investigation had finished.
FSA managing director of supervision Jon Pain (pictured) told MPs at today’s Treasury select committee that the FSA could not name the firms being investigated over their arrears management processes but this could change if the Financial Services Bill passes through Parliament.
He said: “As part of the Financial Services Bill presently before Parliament, there are some provisions for changing that process.
“Clearly, we will wait to see what progress that bill makes. But if those provisions were adopted, that would change the process at the stage at which a firm would be identified as part of that enforcement process.”
Pain added that if the bill was not to pass through Parliament successfully, the FSA would “not then lose our endeavour of wanting to revisit it”.
Pain also told the committee that the FSA’s £2.8m fine of GMAC-RFC for failing its customers and the £7.7m it ordered the lender in redress to over 46,000 borrowers in October 2009 was to show that this type of behaviour would not be accepted.
He said: “We think it was very important to show that if firms did not treat consumers appropriately, then there were consequences. And these are the very stark consequences in not managing your arrears relationship with your consumers in a fair and even-handed way.”
FSA director of small firms and contact Lesley Titcomb, who was also a witness at the committee, said that there are currently seven firms being investigated for arrears handling by the FSA.
However, Council of Mortgage Lenders director general Michael Coogan told the committee that it is unfair to name firms in the investigation stage.
He said: “Innocent until proven guilty is still an important principle I think. I think it’s fair to the firms, in an environment where enforcement action can last for quite considerable time, that you don’t have uncertainty hanging over them by referring to them in public at one stage and having many months before a final decision is taken either way.”