Following a period of consultation, the FSA has published its proposals to exert tighter control over the mortgage market by extending the approved persons’ regime to cover all those involved in advising on, arranging or entering into home finance business. Rules will also be extended to include the compliance oversight function.
The FSA has been very clear that its intention in doing this is to enable it to track individuals who are engaged in improper behaviour and to enable it to apply sanctions where fraudulent activity, takes place. The lack of any such ability has been a weakness in the regulatory regime that was identified before the FSA took responsibility for the mortgage sector.
The recent proposals from the regulator recognise the inconvenience of maintaining a register will be more than offset by the ability to protect the public from the poor behaviour of a small number of individuals.
Firms have a limited period in which to make sure all their staff affected are able to meet the revised requirements, so should waste no time in identifying what the impact is and taking the necessary steps to ensure their ability to trade is not affected.
The FSA intends to track individuals engaged in improper behaviour and apply sanctions wherefraudulent activity takes place. The lack of any such ability was a weakness in the regulatory regime identified before the FSA took responsibility for the mortgage sector
New rules are also being introduced to regularise the way in which lenders interact with borrowers who fall into difficulty with their payments.
This is an area where the industry has made significant progress in recent times and there is now much less reliance on or desire for repossession.
However, consumer groups have still been able to identify cases where fair treatment by the lender might be debatable and it is to be hoped that the new proposals will ensure such accusations will in future be unfounded.
Debt management is likely to become a bigger issue over the coming months as the economy reacts to the changes made in the recent Budget.
Significant shrinkage of the public sector is likely to see many individuals having to seek new employment. Some will be fortunate and will move seamlessly into a different career, others will find it more difficult and may find their income adversely affected and their finances strained.
In these cases, the usual rules must be applied and communication with lenders and advisers is paramount.
Advisers may also consider being proactive in reminding clients of the advantages in regularly reviewing their financial arrangements and considering how best to financially prepare for the ups and downs of life.
Richard Fox is chief executive of the Chartered Insurance Institute’s Society of Mortgage Professionals