FSA slated over its treatment of lenders
December 31, 2009 by admin
Filed under News, News-Loans
According to recent reports the Council of Mortgage Lenders has accused the UK’s financial regulator, the Financial Services Authority, of treating banks and other lenders like ‘drug dealers at the school gates’.
Matthew Wyles from the CML said that lenders were being treated as thought they were evil, and their only goal was to lure unsuspecting and innocent consumers and use them to make money for themselves regardless of the effect on the consumer.
Mr Wyles said: ‘I have the feeling that regulators see lenders as the sweet shop owners - or worse the drug dealers at the school gates - of the mortgage market, enticing innocent consumers into their clutches and then getting them hooked. The FSA moves from the principle of caveat emptor at great peril. It risks creating the kind of moral hazard it wishes to avoid, where consumers feel they need take little or no responsibility for their own financial decisions.’
The FSA was also attacked over the reforms that it has planned, and the CML said that many of these measures would result in higher borrowing costs for consumers, which would be defeating the object if the FSA was looking for a fairer deal for consumers when it came to borrowing.
The CML went on to state that one of the reforms, which involved the shaking up of self certification mortgages, would mean that millions of consumers who were self employed could end up frozen out of the property market.
The Financial Services Authority on the other hand has expressed concerns over how reckless lenders have been over recent years, and insists that the reforms that have been planned are the result of lessons that have been learned from the financial crisis. The group added that its reforms should not affect millions of self employed people, as genuine self employed workers would be able to prove their income in one way or another.
Tags: council of mortgage lenders, Financial Services Authority, Economy of the United Kingdom, Matthew Wyles, mortgage, Financial services