tony's blog

Wednesday, October 6, 2010

Trade bodies - how to make friends and influence people

Trade body announcements and other industry commentary came in thick and fast yesterday starting just after 6am with Michael Coogan’s live interview on Radio 4’s Today programme discussing the latest CML research. This shows, according to the CML, that the FSA hasn’t done its homework properly in relation to responsible lending proposals within the MMR and the potential impact on the market if the proposals were implemented.  

I confess at this point I have not been through the research fully and so will resist the temptation to discuss the CML’s conclusions and whether I agree with them. But wherever you stand on this issue I wonder whether the industry is showing itself in the best possible light. What are trade bodies trying to achieve? The FSA have come out with their consultation paper and have welcomed input from the industry. We can either do that discretely with the FSA who, in my experience welcome constructive comment, or we can be shrill and publicly critical about our views. Which do we think will be the most effective way of working with the FSA I wonder?  

I know which I prefer and recommend and I suspect I know which will have the most impact in ensuring that proportionate responses are made and points taken on board within the final shape of regulation. I think trade bodies are at risk of damaging the industry and making themselves ineffective and redundant if they aren’t careful.  Watch this space!

2 comments:

  1. I concur with Tony on this. Even the CML data/response seems to show that interest only was much higher when rates were higher and affordability more stretched. There seems to be a line of argument that as rates are lower and affordability improved, resulting in lower levels of interest only, that there is no need for regulatory involvement. Surely, when rates rise and affordability stretches further, interest only will rise. Some brokers must use this method to get a mortgage when C&I is not affordable. As an industry we must move to make interest only relevant only in specific circumstances. I therefore applaud those lenders, including Halifax, who are making decisions on interest only that reflect the regulator's concerns.

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  2. 4.24am you gotta get a life i reckon Charles?? ;-)
    Tony/Charles, not sure why you should feel so aggrieved at AMI and CML response to the current legislation and items for debate on interest only? isnt that exactly what we as an industry should expect?
    this may not be just the death of a mortgage repayment type that has served millions well but also the death of an industry and a lot of unhappy people, namely your and my clients!! what do you think will happen to rents if say interest only mortgages were abolished for Buy to Lets/
    why dont you both come to the MMR meetings at AMI and see what the leading names in our industry think and share your views..... it would make for an interesting hour me thinks!!
    i would welcome your contact and comment!!
    rgds michael
    michael@easyfinancials.co.uk

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