The FSA has issued a warning to building societies to improve their compliance structures.
Speaking today at the Building Societies Association annual conference in Birmingham, FSA director of conduct policy Sheila Nicoll said the regulator is concerned the compliance checks carried out by some building societies are not up to scratch.
She said: “Overall, our current supervision of building societies reveals it is far from clear how robust and effective some of your compliance arrangements are.
“If you have not already done so, you need to review your compliance arrangements to make sure they are robust, comprehensive and up to date.”
Nicoll added that board members must ensure they have a tight grip on activities.
She said: “Boards need to be sure that what happens on the ground is what they want and expect to be happening. And let us not forget that if you get this wrong, there are significant consequences, not just in terms of the hit on profits and capital caused by redress and FSA fines, but probably even more the harm it does to your society’s reputation and indeed the reputation of the sector as a whole.”