The ‘broker bashing’ follows months of the CML continuously placing the blame for regulatory failings onto intermediaries. Mortgage Introducer revealed in October that lenders were purposely feeding back to the market that the majority of mortgage complaints put to the Financial Ombudsman Service (FOS) relate to brokers, although it is understood most concern lenders, in particular their high exit fees.
During Coogan’s speech at the CML conference this week, he proceeded to tell the audience about the ‘bad side’ of the current mortgage market, including the ‘repeated compliance failures by intermediaries’. He went on to say the ‘downright ugly’ included brokers ‘failing to hand out KFIs and IDDs at the right time and the inconsistent application of rules’.
Coogan admitted the FSA might look at the state of lenders’ systems but blamed their inconsistent quality on the existing MCOB rules. There was also no acknowledgement it was lenders’ over-interpretation of the rules that resulted in 14-page KFIs.
The CML’s lack of support for brokers was also highlighted when it declined to support Mortgage Introducer’s ‘Get The Facts Straight’ campaign which sought to introduce a standardised KFI.
There were suggestions the CML had been influenced by the big lenders who had spent a lot of money on their compliance and did not want to see any changes.
Bernard Clarke, spokesperson for the CML, said: “We’re not ‘broker bashing’. We are simply reflecting what the various research and mystery shopping exercises by the FSA have found. By and large lenders are on-track with their compliance. But the record-keeping and advice by some brokers has been questioned.”
But Cummings said: “I will want to see a copy of Coogan’s speech. I would be very disappointed if someone in his position is sending out unwarranted, negative messages about brokers. It should be remembered lenders are fined by the FSA much more than broker firms.”
