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Newsroom & speeches
165/99
18 October 1999
A cost benefit analysis of the option to regulate advice on and the sale of mortgages, published today by the Financial Services Authority (FSA), was welcomed by Economic Secretary Melanie Johnson as a further important contribution to the continuing debate on how financial services consumers' interests can best be protected.
Opening a Treasury seminar with speakers from regulatory, industry and consumer bodies with an interest in mortgage services, including the FSA, Allied Dunbar, Direct Line, Halifax, the Council of Mortgage Lenders and the National Consumer Council, Miss Johnson said :
"Recent months have seen the most concentrated debate on mortgages for many years. This reflects the importance the Government puts on ensuring that consumers' interests are fully represented and safeguarded, and placing these important issues firmly on the public agenda.
"Today's seminar marks a significant further step in the debate, and in ensuring that this is informed and constructive. The FSA research into the potential costs and benefits of regulating mortgages published today will help to achieve this. This clear and helpful analysis finds the arguments finely balanced. It is a welcome contribution which will add insight to and enhance debate during our consultation exercise and as the Financial Services and Markets Bill moves through Parliament.
"While recognising that there is clearly potential for benefits from regulation, and that the costs to the individual consumer need not be high, the report also recognises some limits to what benefits regulation might achieve in some areas of concern. We need to consider the report carefully and in detail, and in the context of both wider developments for the mortgage market and consultation representations, before coming to a view on whether to implement the power to regulate advice on and the sale of mortgages."
"This is a genuinely open consultation process - we have not ruled anything out, and, perhaps more importantly, have not ruled anything in. We will not make any decisions until all responses have been received and look forward to using the fruits of this debate as an integral part of the process."
Outlining developments to help mortgage buyers, Miss Johnson added :
"Recent months have also seen significant progress involving agencies across Government in a wide ranging effort to make buying a home - one of the most important transactions most of us will ever make - easier to understand and achieve, with a faster, more transparent and more consumer friendly process. This work is now coming to fruition.
"The past week has seen a new buyers and seller's information pack from DETR, while I announced proposals for a CAT standard mortgage to ensure borrowers get products with no surprises: clear, straightforward products with no hidden charges or costs. DTI are publishing a guide to questions mortgage buyers should ask both themselves and lenders before making such a vital commitment.
"These are examples of ways in which we can and will continue to seek ways to help consumers by whatever means we can. Mortgages are high on the public agenda. We will keep them there until we see the improvements consumers deserve."
A consultation document - Regulation of Mortgages : a discussion document by HM Treasury - to seek views on whether there is a case for statutory regulation of advice on and the marketing of mortgages was announced by the Treasury in July 1999 (HM Treasury press release 122/9). Responses should be returned by 22 October to :
Janet Robbins
Rm 116/G Telephone: 0207 270 5294
HM Treasury Fax: 0207 270 4694
Parliament St Email Janet Robbins at the address below
London
SW1P 3AG
Treasury proposals for a CAT standard mortgage were published on 13 October (HMT press release 163/99).
Media enquiries should be addressed to Charles Keseru or Deborah Done at the Treasury Press Office on
0207 270 5188 or 0207 270 5222 respectively.
The FSA report 'A cost-benefit analysis of statutory regulation of mortgage advice' is available from the FSA press office on 0207 676 3232 (contact : Sarah Modlock), or from the FSA website at the address below.
