Lender panel data scheme heads for launch despite solicitors’ worries
Hudson: concerns over aspects of the scheme
A privately run portal that will centralise conveyancing panel firms’ data on behalf of participating mortgage lenders, is gearing up for launch amid controversy fuelled by Law Society reservations about the scheme.
Lender Exchange will be run by Decision First Limited, a joint venture between First Title and Decision Insight Information Group, which owns a property search business. It won the contract from founding lenders Lloyds Banking Group, Santander and RBS Group in a tendering exercise. It is set to launch at the end of next month.
Other mortgage lenders understood to be close to signing up include TSB and the Co-op, plus smaller lenders including Bank of Ireland, Paragon Mortgages Ltd, and Coventry Building Society.
The premise of the venture is that it is inefficient for law firms to provide near-identical information to different lenders when applying for panel membership, or maintaining their presence. Reducing the duplicated effort will save firms money, Decision First has argued, since without the portal eventually all lenders would have been forced to follow Santander’s example and charge for the administration of their panels.
The Law Society has expressed repeated reservations to the Council of Mortgage Lenders (CML) – which has had a limited oversight role in the formation of Lender Exchange – although the society said it supported the principle of a single data collection exercise.
Correspondence between chief executive Des Hudson and the CML’s director general, Paul Smee, in October and November, revealed tensions over, for instance, why a commercial body had been selected as “gatekeeper” to panel membership. Other concerns included those relating to transparency of the portal’s terms and conditions, and the security and use of law firm data.
In a letter to the profession in December, Mr Hudson said the society had “repeatedly offered” to provide Conveyancing Quality Scheme (CQS) data “free to lenders” but the offer had been “ignored”. As a result, he complained, “a single commercial provider has been given a powerful position and the potential to control the dynamics of the conveyancing market and introduce needless cost to the detriment of consumers”.
Speaking to Legal Futures, Decision First’s managing director, Justin Parkinson, said he had written to Mr Hudson offering to share the proposed terms and conditions “in a consultative manner” as long as discussions were kept confidential. He said he had been talking to the Law Society “for over 12 months” about the scheme. “My frustration is that that seems to be ignored by the Law Society and they pick and choose what information to pass out to their members.”
He said concerns over a private business running the exchange were unfounded. Decision First had won the contract in open competition, in which the Law Society also tendered. He argued that the status quo was “untenable”. He explained: “If nothing was to happen, then I could guarantee that lenders would take their own course of action and every law firm in the country would be effectively penalised as a result”.
He reassured solicitors that their data would be safe with Decision First and denied he would have any influence on panel membership: “There will be all the protections in place from a data access, data security, and data protection point of view… and we make no decision on the data submitted – we don’t look at the data and interrogate it and come up with a recommendation.
“We simply check its consistency and validity, make sure that any [information] gaps are plugged and check if any incorrect documents [have been] uploaded. We effectively package all that up for the lenders, who make their own decisions. No lender will see who is on one panel versus another… So almost nothing changes other than life gets easier.”
Looking to the future, he said: “My personal preference would be that once we are launched and live, law firms who are on CQS… would be able on our system to click a button that simply says ‘for CQS you need some additional information submitted’ and we [would] work with the Law Society on what that data is, how it works, and how the fee structure would work. I personally think we could make it more cost-effective for law firms.”
A Law Society spokesman said: “The Law Society continues to have reservations about Lender Exchange and the impact it could have on members. We offered to provide a service free to lenders and that offer still stands. We are organising a meeting with Decision First to go through their terms and conditions and assess what ramifications they could have for our members.”
Tags: conveyancing, conveyancing quality scheme, Council of Mortgage Lenders, CQS, Mortgage lender panels
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