FSA mortgage remit could be extended

The FSA’s remit could be expanded to include the regulation of buy-to-let and second-charge mortgages, under new proposals published by the Treasury today.

Its consultation paper also includes plans to protect borrowers when lenders sell on mortgage books to third parties. Under the proposals, they will be protected by FSA regulations requiring fair treatment of customers.

Exchequer secretary Sarah McCarthy-Fry says: "Since the onset of the global financial crisis, the Government has worked hard to ensure mortgage borrowers are treated fairly by their banks. Our focus has been to do all we can to make sure people can stay in their homes and to limit repossessions as much as possible.

"But we are aware that this crisis has raised issues around the world about the regulation of the mortgage market. We are determined to reform the system for the future, to offer both stronger protection for consumers and greater stability in the housing market."

The consultation sets out the details of the proposed legislation and will close on 15 February 2010. Any final measures will be implemented through secondary legislation.

The consultation builds on announcements made in Reforming financial markets, which was published by HM Treasury in July. It set out the Government's analysis of the causes of the financial crisis, along with a series of proposals to reform and strengthen financial regulation, and protect and support consumers. The Government will implement these proposals via the Financial Services Bill currently before Parliament.