A letter to the Treasury Financial Secretary has been signed by seven financial services trade bodies asking for FOS powers to be restricted.
A letter to Mark Hoban, Treasury Financial Secretary, has been signed by seven financial services trade bodies asking for FOS powers to be restrained within the new regulatory structure.
The bodies, including Aifa, the Association of British Insurers, the Building Societies Associated, the British Bankers Association, the Association of Financial Mutuals, and the Council of Mortgage Lenders believe the FOS should be forced to consult with stakeholders before issuing guidance or policy notes. The seven also say that the current regulations allow the FOS go above its main role, and carry out functions deemed more suitable for the regulators.
The letter calls for the role of the FOS to be clearly defined in decree to provide greater clarity that firms will not be hit by retrospective interpretations of the rules. It suggests the FOS should be not be involved in the process of determining issues with wider implications, which it carries out in conjunction with the FSA and the Office of Fair Trading.
A FOS spokesperson responded by saying that the service was set up by Parliament to be “completely operationally independent of all stakeholders”, which allowed it to “make decisions that were fair and unbiased in individual cases, without undue influence or inference.”
The letter also called for the FOS’ power to prevent test cases being taken to court to be removed.
The FOS spokesperson said: “Our role is set out in statute and our relationship with the regulator underpinned by law. The wider-implication process has been enhanced with a coordination committee and the procedures under which a test case can be carried out is set out in law.”
This relationship “will also be set out in statute following the formation of the FCA”.
The Council of Mortgage Lenders spokesperson said that they would not comment on what was “meant to be a private letter to the Minister.”
The ABI also declined to comment.