The Association of Mortgage Intermediaries (AMI) has issued a strongly worded response to the Financial Conduct Authority’s (FCA) fees and levies consultation for the next year.
The trade body has expressed its deep concern over the approach and design of the proposal.
The AMI response has challenged that they have only allowed a five week consultation period which is the shortest in memory. For the first time, the FCA has failed to publish its business plan to underpin the budget.
AMI says the proposals introduce a new levy on networks which was not consulted on in the November policy proposals, as it should have been. This creates a backdated levy on some firms which breaches all principles of fairness, AMI said.
In addition, the broker body says there is a proposed significant increase to the minimum fee on consumer credit “where our members have no income”. They are required to hold this as a technicality, and despite AMI saying it has prior assurances that further increases are to be levied.
Robert Sinclair, chief executive of AMI, said: “We echo and support the significant issues raised by our colleagues at PIMFA who share our concerns on the sudden and unexplained additional fees on networks. This £10m additional charge is a disgrace. The industry deserves a better explanation on why from this new FCA management team.
“The introduction of a new fee category (A22) is a change to the process of how the FCA introduces new fee policies and should have been included in the November policy paper with a full cost benefit analysis. This is a failure to follow proper process on the FCA’s part. Giving only a five week consultation window breaches the principles of good regulation.
“It is not inconceivable that current network models will be forced to change and that there could be a large migration of firms from AR to DA or leaving the market. In proposing these changes, the regulator must consider whether it would be comfortable with such a significant change to the mortgage intermediary sector structure and its ability to manage and control such a migration.
“The cumulative effect of the changes in FCA periodic fees and application fees; the new levy on principal firms for ARs and IARs; increases to FOS levies and case fees; the large increase in FSCS levies and the substantial increases of PII premiums exclusions and excesses; is having a profound effect on firms’ profitability and potentially their viability.
“These cumulative proposals display a lack of clarity, fairness and is undoubtedly misleading.”
