The Consumer Protection Code 2012 (CPC)
A few notes on the most up to date regulation is perhaps overdue, normally regulation is part of work and not something the general readers care about, but with the increased focus on it we have had people asking how it works so I’ll start to cover some of it.
The Consumer Protection Code (CPC) puts several responsibilities onto financial firms, it offers various protections to consumers and is available on the web.
One of the requirements is for the firm to have a ‘terms of business’ letter which they give to clients prior to offering advice and is covered in section 4.13 of the code.
Using the term ‘independent’ are no longer usable at will. An intermediary can only use the term ‘independent’ in their trading or company name (or in how they describe themselves) if their principle regulated activities are based on fair analysis of the market and it allows the consumer to pay for their …
Should the regulator get involved with mortgage pricing?
We touched on this topic over on MyHome.ie last Friday in our weekly blog contribution to their site.
It is important to look at this from a few perspectives
1. Regulation and the role of the Regulator 2. Past decisions by the Regulator 3. Politics and policy
1. Regulation and the role of the Regulator: The idea of regulation is not for price control, rather it is about prudential control. As galling as it seems to everybody, the Financial Regulator is not (nor should they be) empowered to tell banks what prices they can charge. This is sickening given that we have spent €10,000,000,000 this year alone via the NPRF in supporting our banks (€8.8bn to AIB and €1.2bn to Bank of Ireland).
Readers, if you know of other jurisdictions where regulators set prices please let us know! The idea of a Regulator is that you pay for them …
Financial Regulator, official change name to Central Bank of Ireland
In recent correspondence the Financial Regulator wrote explaining that they have merged with the Central Bank, so in future, instead of ‘XYZ Ltd. t/a FirmName is regulated by the Financial Regulator’ companies will instead have to replace ‘Financial Regulator’ with ‘Central Bank of Ireland’. So the re-brand is now complete and the error of split regulation has now been undone.
With current advertisements and promotions you can continue as is but with future print runs or information the new information must apply.
Brokers will also have to provide an email address to the Central Bank for all regulation correspondence, as well as keeping a proper file of CPD (Continuous Professional Development) hours.
A register by firms of who is acting on their behalf must be available at all times and kept up to date, and MCR (Minimum Competency Requirements) must also be kept proving that experience is relevant to a present role.
Oversight of prudential supervision and compliance has now been moved to the Consumer Protection Codes Department within the Central Bank of Ireland.
Concerns surrounding people coming off tracker rates
The Financial Regulator has voiced ‘concerns’ over the manner in which disclosure and transparency are enacted when people move from a tracker rate onto any other rate in a press release yesterday.
There were no firm figures given, and no direct accusations (although the Financial Services Ombudsman has received c. 60 complaints). The release comes on the back of a story in the Sunday Business Post by Emma Kennedy which outlined that PTsb ‘misclassified’ up to 300 mortgages and put them on standard variable rates rather than trackers. The issue was spotted by PTsb and rectified by them, customers have been refunded (on average €5,000) the difference they paid plus interest.
The way in which people ‘come off’ trackers tends to be by their own volition, if they opted for a fixed rate while on a tracker contract they do not need to be re-offered their tracker rate at the end. If they were on a fixed rate and are coming …
No use having teeth if you don’t bite: FSA shows it has grit.
Below is a press release from the Financial Services Authority in the UK. This is how they deal with executives who cross the line, while we can praise reform in Ireland it is clear to see that we do not come anywhere near the standards set in the UK when it comes to discipline in the market, while over 90% of complaints are against banks, they have the fewest sanctions and yet this is the same banking system which nearly pushed the nation over the edge. The people in charge now are the same people that lead us here and it is shocking that we laud ‘new regulation’ when in fact we are still behind the times.
It is becoming evident that our own banks may have not been totally forthcoming in how they presented their own statements of affairs in the past, will similar sanctions therefore follow?
27 July 2010
FSA bans and fines former Northern Rock finance director £320,000 for misreporting mortgage arrears figures
The Financial Services Authority has fined David Jones, former finance director (FD) of …
Regulation failure: Independent brokers unable to be ‘independent’
We were thinking of changing the way that brokers operate, by saying to our clients ‘our service comes at a price, we’ll advise you on any lender in the market and be totally independent, if we place your loan with one that pays commission you can set that against your fee, and if not then pay the fee’, doing so in the belief that totally transparent and independent advice is a good thing, and something that everybody wants, the broker, the consumer and the Regulator.
Sadly this is not the case, instead the Regulator (soon due another name change to ‘Central Bank Financial Services Authority of Ireland’) is relying on the letter of the law in the Consumer Credit Act of 1995 to ensure that brokers can’t give best advice. This is an example of total regulatory failure.
The actual portion of the code is S. 116.1.b which states ‘A person shall not engage in the business of being a mortgage intermediary unless— ( a ) he is the holder of an authorisation (“a …
Irish Banking. How does it play out?
I used to be in a Chess Club, and one thing it taught me (apart from how to lose using the Kings Gambit) is that you can often see a general result long before you see it exactly, when you are a piece down and can’t control the centre of the board you know you are in trouble, but how and where the checkmate occurs is unknown, game theory can’t tell you precisely and reverse integration from the end game may not bring you to where you started from, but the player knows instinctively that they are up against the wall.
Sometimes appearances can be deceiving, you might think you are fine and you are not (2003-2009), other times you can get caught up about losing a pawn but you are in fact gaining ground (2010), albeit painfully and slowly.
I believe the same can often apply to markets. Today we will look at the reasons for why we believe the banks are going to survive and furthermore, what the results will be of their survival.
The core belief in …
Central Bank Reform Bill 2010
We all want ‘tough regulation’, I would argue it doesn’t need to be tougher, rather it needs to be more pragmatic and enforced, and of those two criteria enforcement being the greater.
The Central Bank Reform Bill 2010 is going to give God powers to the Central Bank/Financial Services Authority of Ireland. Essentially it sets out a framework whereby they can call all of the shots, right down to how companies promote people.
In Part 3 s20(2) they can determine either by their interpretation of title or their interpretation of a persons role, whether they have any controlling function, and if so they require CB/FSAI authority in order to do their job, this is an additional layer of HR activity that will be injected into financial services companies.
Part 3 s35(i) states that a function requires pre-approval if the CB/FSAI deem it to be so on grounds of ‘size or complexity’, yet they don’t state any parameters for same, meaning a mom & pop shop could fall under these rigours based upon the …
Irish Independent: Your Money, advice on keeping your home
We got a mention in today’s Indo in the ‘Your Money’ section, the story is about the one year freeze banks have on repossessions.
The article by John Cradden covers the main issues of the day in the repossessions arena as well as giving some great general advice on ways to protect yourself from potential rate hikes by lenders.