There seems to be a popular misconception that if the Conservatives win the election then a few days later the lights will be switched off at the FSA building and we will be able to carry on working without its interference. Whilst after Nick Cleggs's stellar performance on last weeks televised part leaders debate the chances of a Tory victory went down slightly we need to set out our expectations at a realistic level. Even if David Cameron and his growing family walk through the door of their new home in Downing Street sometime after 6th May, we will be working with the FSA for the foreseeable future.
The problem that the FSA has is that it is stuck in the middle of a terrible mess, it gets blamed by everyone for everything. The credit crunch and thus the recession, house price increases and subsequent falls, allowing self cert and then proposing its scrapped, bank bonuses etc. the list just goes on and on. At the moment it is between a rock and a hard place on lending. Reading its response to the MMR it isn't keen on individual product regulation, maximum LTVs and LTIs, however our politicians, keen to blame mortgages for the credit crunch, seem hell bent on bringing in as much product regulation as possible. Northern Rock's Together mortgages are, according to some, the root of all evil but if you take Northern Rock's cumulative losses on these mortgages then it's a drop in the ocean compared with RBS losses on the purchase of ABN Amro and HBoS's mainly property linked corporate losses. Product regulation is not the answer and is a slippery slope and to its credit the FSA realises this and is doing its best to resist.
I think in the mortgage industry our greatest problem has been a lack of understanding between the intermediary sector and the FSA, however this is not a result of any deficiency of the work of AMI which does a great job of representing us. Sadly trade bodies are quite happy to point the finger at brokers and say "its all their fault". The good news is that the FSA has realised that it needs to engage with brokers and is keen on undoing the damage. The small firms section of the FSA's website is very simple and easy to use. People like Lesley Titcomb are very accessible and keen to engage and despite the reception she got at last years Expo, she still comes out to speak at broker events where she and her colleagues welcome feedback. We are all very critical of the FSA when it adds staff numbers to its already substantial team however it has been trying very hard to recruit from the broker industry. I know at least one broker who has gone there and another who joined from AMI. The FSA has been running adverts on trade press web sites to try to attract more brokers. If it really thought brokers were the cockroaches of the industry and something to be exterminated it wouldn't bother. It would simply recruit from the vast pool of unemployed graduates. By recruiting former brokers it shows it is putting its (or rather formerly our) money where its mouth it. The more brokers who work there the better the understanding it will have of us.
We need to accept that things will never go back to the way they were. Light touch regulation is as dead as a dodo. Heavy blunt and invasive regulation is going to be the way forwards. If we sit back and throw rocks at the FSA and carry on with the Millwall mentality of "we're brokers, no one likes us but we don't care" then our jobs are going to be a lot harder as the regulation which will be imposed will not only be heavy, blunt and invasive but it will also be impractical. If we take the view that we need to continue to fight for our industry and that we need all the friends we can get, the closer we work with the FSA, the more honest and constructive our feedback is, the more workable the regulation will be. The FSA knows it isn't perfect but it has shown it wants to work with us so we need to meet it halfway.
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