Jonathan Davidson said: “I know there has been mixed reception about the announcement of our market study, particularly with intermediaries expressing their concerns."
The Financial Conduct Authority has hit back at criticism from the Association of Mortgage Intermediaries for launching a fresh probe into the mortgage market.
On Monday the FCA announced another ‘targeted market study’ in Q4 2016 after publishing the ‘Feedback Statement – Call for Inputs: competition in the mortgage sector’ and ‘Responsible Lending Review’ into mortgage lending.
The study will look at the impact of increased intermediation in the mortgage sector, developing better technological solutions and the impact of panels and other commercial arrangements between lenders, brokers and others in the supply chain.
On the day of the announcement AMI responded in a statement that it “has to express its disappointment that after the five year Mortgage Market Review and the two years it has taken to implement the Mortgage Credit Directive, the sector is not to be left alone”.
But Jonathan Davidson, who is director of supervision in the the FCA’s retail and authorisations division, said today: “I know there has been mixed reception about the announcement of our market study, particularly with intermediaries expressing their concerns.
“But I would like to make a couple of points about that. First of all we are looking a narrow set of issues; much narrower than we set out in the Call for Inputs.
“I think it’s also an important point to stress that we have no preconceived views on any of the issues raised. The issues that we’re looking into are the issues the industry asked us to look into and we’re going to give them a closer examination.”
Davidson was speaking at the Building Societies Association's annual conference at Sage Gateshead.
The FCA’s Call for Inputs paper raised concerns about ineffective competition where lenders restrict competition to a panel.
On Monday Robert Sinclair, AMI chief executive, said: “We are struggling to see the need for even a targeted market study, as the bulk of the issues could be addressed by thematic work and supervisory action.”
Further infuriating Sinclair was the FCA’s director of competition Deborah Jones, who said in an interview that it will “tweak MMR rules if needed”.
Sinclair added: “If the FCA is seriously considering allowing lenders to waive the stricter advice rules from suitably qualified advisers when existing borrowers remortgage with their lender, brokers must be given confirmation that the adviser who recommended the original product will no longer be on the hook for that advice.
“Brokers cannot be expected to be responsible if the lender starts changing the terms of the product and the FCA lets them.
“We would need to know that advisers effectively had indemnity and lenders become fully accountable.”
With talk of the MMR being tweaked Davidson stressed the FCA will guard against a “potential relaxation” in lending standards to ensure "that they don't slip".
