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Treasury Committee to grill regulator on MMR

FSA chiefs are to be grilled by MPs on the Mortgage Market Review next month.

The Treasury Committee announced last week it will be holding an evidence session with the FSA on March 14.

Lord Turner, chairman of the FSA, and Martin Wheatley, managing director of the Conduct Business Unit at the FSA, will be giving evidence to MPs on the regulatory proposals, due to come into force in 2013.

Association of Mortgage Intermediaries director Rob Sinclair says: “The TSC asked us for some evidence on the MMR and the details have to remain confidential until after the hearing.

“We highlighted areas like interest-only transitional arrangements, advice and the delays to the approved persons register. We hope these will be discussed at the meeting.”

Building Societies Association head of mortgage policy Paul Broadhead says the committee is likely to scrutinise issues such as whether the MMR will depress mortgage lending further, how the regulation will work together with the European mortgage directive, and how confident the FSA is that there will be no unintended consequences.

He says: “It is absolutely right the government seeks reassurance that the proposals will not have a detrimental impact on the housing market.

“This is especially pertinent considering the fragile state of the economy and the fact that this is the biggest regulatory change in the mortgage market since regulation was introduced in 2004.”

Industry consultant Mehrdad Yousefi says there is a risk that the committee will focus too much on the broader impact of the proposals, rather than scrutinising the details and how they will be implemented.

He says: “It is down to the Council of Mortgage Lenders and the AMI to provide the MPs with some pointed questions so they can grill the FSA on how the proposals will affect brokers and lenders.”

Sue Anderson, head of member and external relations at the CML, says the trade body is in regular contact with the committee and it would not be unaware of its views on the MMR.

She adds: “It is a good thing the committee takes an interest in rule reform, but I don’t expect the enquiry to change the direction of the MMR.”

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  1. The people they should be ‘grilling’ are the Treasury officials who designed the MMR under the previous Labour government, it was a knee jerk reaction (aren’t they all!) to the ‘banking crisis’, policy on the hoof is never a good thing, particularly when the politicians are involved.

    The FSA has no say in the matter and neither does the elected Chair of the TSC.

    The end result is consumer detriment because banks are being treated like children. I suppose eveyone could be forgiven for believeing they are but unless banks can decide what they can and cannot do then the world becomes one or two fewer shades of grey.

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