The move by Halifax to set price fee caps is a bid to “dictate” the payment terms of suppliers, according to the Association of Mortgage Intermediaries.     

The body adds that the imposition of a cap is a move towards “price-setting” that “potentially restricts consumer choice.”  

Halifax, owned by Lloyds Banking Group, yesterday said it would set fees to brokers who sell its products at 1% of loan amount, or £1,500, whichever is greater, from 1 June.  

The lender said that the introduction of the Financial Conduct Authority’s Consumer Duty rules means that it “must ensure customers receive fair value from the service received for any fees paid in our distribution chains, including mortgages”.  

It added that the cap “strikes the correct balance” as regards the Consumer Duty’s fair value assessment.  

But Ami says Lloyds Banking Group should not have a role in setting broker pay structures.  

It says: “Ami does not consider that it is the role of a lender to dictate the fee policy of FCA-regulated intermediary firms.    

“FCA Consumer Duty is clear that each entity is responsible for its own fair value assessment and indeed the rules indicate that it is for the advisory firms at the end of the chain to make the assessment that all costs, including that the total cost of borrowing is suitable for the consumer.”  

The body is also disappointed in the public nature that the lending group has announced this change of policy.  

It adds: “The issue is the principle of going public with this information and the loss of trust it signals in the ability of intermediary firms to accurately assess the fair value of their own service offerings.   

“We are concerned that this move will encourage other lenders to add their policies to the public domain, adding layers of confusion, with a range of ‘fee caps’ that will not act in the interests of all consumers.”  

The association is also concerned that the Halifax fee price caps could be an unfair restraint on trade, or an attempt to introduce “resale price maintenance,” under competition law.  

Ami chief executive Robert Sinclair says: “This intervention in the market by publication of this policy is unhelpful.    

“I have been aware for some time that Lloyds Banking Group along with other lenders have been monitoring intermediary fees and having both informal and formal discussions with firms to establish ‘fairness’ and appropriateness.  To date, these discussions have been relevant and helpful.  

Sinclair adds: “I do not think that regulation has dictated to lenders that they should determine the fees an intermediary charges.  It stretches their Consumer Duty accountabilities to an extreme.   

“We support fee ‘outliers’ being challenged by regulators and networks in a constructive way, not by those whose products we are advising on and distributing.   

“That seems to me to be a slippery slope towards price-setting for a market and potentially restricting consumer choice.”