FSA proposals for mortgage regulation will be slammed as anti-competitive, ineffective and likely to stifle innovation in consultation responses sent to the regulator this week.
Several major lenders say their responses to the FSA's consultation document – due in this week – rip apart the proposals as being a backward step for the market and virtually impossible to implement and enforce.
The news comes as senior mortgage figures predict the vast majority of the regulator's mortgage proposals will become statutory at N3 next year despite industry opposition.
In its response, Yorkshire Building Society blasts the FSA's disclosure regime – which it claims requires an “undesirable” logging system for pre-sale documents – as anti-competitive and likely to force illustration document suppliers out of business.
It also claims the obligation for lenders to police intermediaries is pointless as there are no effective sanctions against rogue brokers contravening statutory rules.
Coventry Building Society is another lender seeking major revisions from the regulator, which it claims is “using a sledgehammer to crack a nut”.
Compliance manager Ian Baker says: “We have some serious concerns about these rules, with the illustration requirements in particular being totally unnecessary, confusing and very difficult to administer. Some of it could not possibly work, and little of it is going to help borrowers.”
An FSA spokeswoman says: “We are grateful for everyone's views on the matter and remain keen to set out a regime that will be good for consumers. We will not shy away from criticism.”