Speaking at Infoline’s Mortgage Strategy and Regulation conference held in London this morning Robert Sinclair, director of the Association of Mortgage Intermediaries, said the FSA seemed to be “taking implementation of MMR more slowly” than previously planned.
Sinclair said: “In practice the FSA was issuing consultation papers at a rate of knots last year and if they were taking their time, they would not have been doing that.”
The FSA has already begun to slow down implementation with the announcement that the approved persons regime will be delayed until 2012 - 2013.
Though there is not an official timetable on the next stage of the MMR, the FSA has suggested it will publish its policy statement on responsible lending in July 2011. If it goes ahead with this date, much of the FSA’s policy statement could fail to take into account responsible lending proposals currently still undergoing consultation in Europe.
Suzanne Macdonald, head of the financial services regulation practice at TLT Solicitors, said she expected the FSA to announce it would delay this as well, adding that: “I suspect if the European Commission carries on apace with its consultation on responsible lending (currently ongoing and due for publication later this quarter) that the FSA will push back its own policy statement another year.”
Sinclair said the shift in attitude would trickle down to all levels of the MMR.
“It’s interesting that the FSA is now appearing to be telling politicians that they have no timetable for MMR," he told the conference. "I genuinely believe that we will not now see the final rules and cost benefit analysis until we’re well into 2012. And I genuinely don’t think we’ll see much implementation until 2013.”
Peter Williams, executive chairman of the Intermediary Mortgage Lenders Association, and also speaking at the conference this morning, said a reason to delay implementation was the need to simplify the MMR proposals after they had become “hugely over complex layers and clauses of regulation”.
He added: “The question we need to ask ourselves is whether the MMR as currently constituted will deliver a sustainable and flexible mortgage market for consumers. I don’t think will. I think it fails the test. I ask whether it is now too late to go back to first principles.
“Although I really do think the FSA staff have been working very hard to try and crack this, I think we are being given a framework that has become incredibly complicated and runs the risk of failing to achieve what it set out to do.”
John Charcol’s senior technical director, Ray Boulger, said he believed the FSA would publish another consultation paper later this year to address this complexity as well as to take account of wide-ranging industry feedback and any European proposals that would have to be considered.
He said: “I think we need a rethink of MMR. And I think we’ll see this from the FSA in the form of a comprehensive new consultation paper taking into account all three consultation papers already published.”
