FSA proposals 'discriminate against building societies'
7th September 2009
Plans to impose further regulations on the lending sector would make life harder for building societies, it has been claimed.
Speaking to the BBC, director-general of the Building Societies Association (BSA) Adrian Coles explained that proposals by the Financial Services Authority (FSA) to limit risky lending would be 'discriminatory'.
The FSA has announced plans to clamp down on lending activity among mutuals, including curtailing the number of high loan-to-value mortgages offered by societies.
Mr Coles explained: 'The FSA wants controls to make sure mutuals operate safely in the future.
'But if you start restricting building societies, it is hard for them to diversify and the sector won't be able to react to market drivers.'
Gross lending by building societies totalled GBP 2.1 billion in July 2009, which is the highest this year.
However, it is 42 per cent lower than the GBP 3.6 billion lent in July 2008.