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McCarthy says enforcement not top priority

FSA chairman Sir Callum McCarthy says the regulator will not make enforcement its number one priority and contrasts this with the hard-line stance of US regulator the SEC.

Speaking at the CML annual conference this week, McCarthy contrasted SEC chairman Chris-topher Cox’s recent speech in Florida stating that enforcement was its top priority, with the way the FSA has approa-ched mortgage regulation.

McCarthy said the FSA had taken an educated approach to regulation in this area, giving warnings where necessary and listening to industry responses rather than basing it around enforcement.

However, McCarthy gave a warning regarding lifetime mortgages, saying that mys- tery shopping exercises had shown that brokers were not giving enough information for customers to make infor-med choices.

He said the regulator had taken enforcement action against one firm over lifetime mortgages and will now app-roach the issue with more vigour to ensure that brokers and lenders were treating customers fairly and offering pro-per disclosure on the product.

He said he thought brokers rather than lenders were most to blame for problems regarding lifetime mortgages.

McCarthy also brought up the issue of lender’s exit and transfer fees, telling the audience that although the FSA did not want to be seen as a pricing regulator, it will be conducting work with lenders to look at bringing down these fees.

McCarthy said: “Some people attack us for not being fiercer but this is a deliberate app-roach. Cox recently said its number-one priority is enforcement but this is against our priorities and the position we have taken with mortgage regulation.”

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