"The industry deserves a better explanation on why from this new FCA management team."
The AMI response has challenged that the FCA has only allowed a five week consultation period, which it says is the "shortest in memory", and has also raised concerns that the FCA has failed to publish a business plan to underpin the budget.
The regulator has also proposed a new levy on networks which was not consulted on in the November policy proposals, and which the AMI says has created a backdated levy on some firms "which breaches all principles of fairness".
The AMI added: "Also, there is a proposed significant increase to the minimum fee on consumer credit where our members have no income. They are required to hold this as a technicality, and despite prior assurances further increases are to be levied."
Robert Sinclair, Chief Executive of the AMI, said: “We echo and support the significant issues raised by our colleagues at PIMFA who share our concerns on the sudden and unexplained additional fees on networks. This £10m additional charge is a disgrace. The industry deserves a better explanation on why from this new FCA management team.
"The introduction of a new fee category (A22) is a change to the process of how the FCA introduces new fee policies and should have been included in the November policy paper with a full cost benefit analysis. This is a failure to follow proper process on the FCA’s part. Giving only a five week consultation window breaches the principles of good regulation.
"It is not inconceivable that current network models will be forced to change and that there could be a large migration of firms from AR to DA or leaving the market. In proposing these changes, the regulator must consider whether it would be comfortable with such a significant change to the mortgage intermediary sector structure and its ability to manage and control such a migration.
"The cumulative effect of the changes in FCA periodic fees and application fees; the new levy on principal firms for ARs and IARs; increases to FOS levies and case fees; the large increase in FSCS levies and the substantial increases of PII premiums exclusions and excesses; is having a profound effect on firms’ profitability and potentially their viability.
"These cumulative proposals display a lack of clarity, fairness and is undoubtedly misleading.”
