The FSA’s proposal to introduce an approved persons regime has come under fire from the Council of Mortgage Lenders.

Whilst the CML supports the bid to stop rogue individuals operating in the contractor mortgage industry, it says the justification to impose the regime on lenders as well as intermediaries is unclear.

Their argument revolves around the differences between lenders and intermediaries and they do not believe that the FSA has recognised these.

According to the CML, lenders are already subjected to sufficient regulation and do not suffer from a lack of training or competence. They estimate that 14,500 employees from lenders could be captured by these proposals.

The CML wants the FSA to modify the proposals regarding the debt management of people with mortgage arrears.

One such area that is concerning them is the requirement to record telephone calls and keep the call for three years after the overdue debt has been cleared. They believe this to be an excessive time and could lead to lenders keeping recorded calls for several years.

There are also concerns that the wording of the new regulations is not clear, fair and transparent and that although contractor mortgage lenders will be required to make significant changes to their systems, consumers will not see a proportionate benefit.

Finally, the Council believes that the new regime will be very costly and could delay the housing market recovery.

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