Conveyancing regulator warns HSBC and other lenders about restricted panels
HSBC: regulator will be monitoring how panel operates
The Council for Licensed Conveyancers (CLC) has waded into the row over HSBC’s 43-strong conveyancing panel, expressing concern that “the limited size panel risks inadvertently restricting consumer choice and distorting competition in the conveyancing market”.
The regulator called for all lenders to put “consumer choice, transparency and fairness first” and warned that it might insist on separate representation if others follow HSBC’s lead.
Four firms of licensed conveyancers are on the panel and CLC chief executive Victor Olowe said: “This recent move by HSBC highlights the challenges in balancing the interests of institutional consumers with those of other consumers. Whilst lenders have every right to decide the make-up of their panels, we do share concerns that such a limited size panel risks inadvertently restricting consumer choice and distorting competition in the conveyancing market.”
Mr Olowe said that although HSBC’s move improved transparency over pricing, the CLC had been in contact with the bank to raise concerns about the adequacy of the panel to cover the interests of consumers.
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He said: “We understand that HSBC’s decision to have a relatively small panel is underpinned by their assessment of current capability and capacity to maintain appropriate ongoing due diligence checks on the panel members. HSBC has assured us that they will review the panel on an ongoing basis, and will adjust the size as necessary to meet demand. This is an issue we will continue to monit
The CLC said it welcomed assurances from other major lenders that they are unlikely to adopt a similar approach to HSBC.
Mr Olowe said: “HSBC maintain that their panel arrangements support consumer choice at competitive fees. However, our concern, if this type of approach did become more widespread, is the extent to which the legitimate choice of individual consumers could be compromised by powerful institutional consumers.
“If the choice of lenders adversely compromises the choices of many individual consumers, it might be in the public interest for us to consider requiring each party to have separate representation on all future transactions.
“Clearly, such an arrangement would in itself raise other challenges and therefore should not be considered lightly and would require a coordinated approach across all relevant regulators and professional bodies in the conveyancing market.”
Mr Olowe highlighted concerns over the undertakings that non-panel firms are required to provide when they act for a customer of HSBC’s – which the Solicitors Regulation Authority has also considered – and said the CLC is working with HSBC “to resolve this issue as quickly as possible”. Otherwise there is a risk of avoid licensed conveyancers breaching the CLC’s code of conduct and compromising their indemnity insurance cover.
Mr Olowe said he welcomed HSBC’s decision to appoint a division of the Countrywide group – of which the CLC-regulated firm Countrywide Property Services is a separate part – to manage the new panel.
He said: “This is a good example of the types of opportunities for innovation and growth that alternative business structures are designed to deliver.”
Tags: conveyancing, Council for Licensed Conveyancers, licensed conveyancers, Solicitors Regulation Authority