AMI today published its controversial response to the Financial Services Authority’s consultation paper on the ‘Mortgage Market Review: Arrears and Approved Persons'.
It says that while it supports the desire to improve standards in the industry, increasing transparency and reducing levels of fraud, to achieve this the individual register will need to cover all those involved in the mortgage process and not just intermediaries.
Robert Sinclair, director of AMI, said: “We have consistently argued for the introduction of an individual register for the mortgage industry.
"This increased transparency will help build consumer confidence.
"But any register must be applied equally across the industry and include all sales staff as well as intermediaries.
"The register must also make clear exactly what each individual’s role is so consumers know who they are dealing with and what actions they are permitted to perform.
“However, we are concerned at the potential impact on intermediaries if FSA was to adopt a full retrospective authorisation process.
"We do not think this should be used as an opportunity to reassess all individuals’ fitness and propriety to continue to operate in the mortgage industry.
"There is a danger that the assessment could exclude anyone with even a relatively minor blip in their credit history, such as a missed credit card payment.
"As mortgage advisers are not holding client money, we recommend a more measured approach.”
AMI is calling for further market failure analysis to justify the cost of introducing any regulatory changes.
Sinclair added: “The regulator has identified a general market failure as justification for making these proposed changes.
"But it has not identified the specific failures that occurred and that would have been prevented had the proposed authorisation process been in place.
"FSA should conduct further analysis to establish whether full authorisation will achieve the desired outcome.”
The Council of Mortgage Lenders declined to comment on AMI's response to the consultation paper.
However just two weeks ago it made its views known in a strongly worded document that blasted any suggestion of branch-based lending staff having to be registered.
It said at the time: "IIn our view, there is a compelling case for greater regulatory scrutiny of the intermediary sector, but the justification for the Financial Services Authority’s proposals to include lenders’ staff in its plans for an extended ‘approved persons’ regime is less clear.
"In our response to the FSA proposals, we argue that there are distinct differences between lender and intermediary firms.
"We are NOT convinced, however, that the FSA has recognised them – or the unintended consequences of the uniform introduction of new regulatory requirements for lenders and intermediaries.
"As part of its intrusive and intensive regime, the FSA already has better regulatory tools to apply to lenders – and with better effect – than an extension of the requirements for approved persons. And lenders already put a high premium on mitigating financial risk and sustaining consumer confidence in established brands.
"The FSA recognises this, and that there is not therefore a significant lack of training and competence in lending institutions. As a result, the risk of consumer detriment is low.
"We are concerned that the regulator’s cost-benefit analysis of its proposals does not reflect their full impact on lenders."
