Closed books and Consumer Duty
In a recent speech, the FCA warned firms to focus on providing fair value in closed mortgage books, defined as mortgages that were sold before 31 July 2023 and that have not been marketed or sold to new customers since. The FCA said, “We know many firms have applied their laser focus on open book […]
Stress tests should apply to all lenders!
The Bank of England recently announced that the major UK banks would be resilient to a severe stress scenario. Re-assuring news, especially considering that their stress scenario was more severe than the downturn during the global financial crisis and significantly more severe than current economic forecasts. PRA regulated banks are of course used to considering […]
Regulators warnings on debt collection
A quartet of regulators, FCA, Ofgem, Ofwat and Ofcom have recently reaffirmed their joint commitment to increasing standards in debt collection activities. Their update comes as part of Debt Awareness Week 2024 and follows on from a letter they jointly published in June 2023, which set out their shared expectations as to how firms from […]
Car finance firms face legal threat
The phrase ‘that’s the tip of the iceberg’ is often overused, but not in the case of three motor finance firms facing a class action in respect of overcharging claims. First, the excessive interest claims are eye wateringly large and second, if Courts follow the PPI ‘Plevin’ precedent, many more firms will be targeted with similar claims.
Another FCA warning shot
The most recent FCA ‘strategy letter’ on consumer lending is one of the most detailed we have seen, and it focuses on three portfolios; high-cost lending, mainstream consumer credit lending and credit unions. This is an unusual step for the regulator, as it normally issues separate letters to each portfolio. However, on this occasion there […]
Managing risk in loan portfolios
As risk consultants, with people that have lived through numerous previous recessions, we recognise the cyclical nature of the economy and the need to be prepared for whatever is thrown at us. We have been warning about the cost-of-living crisis, increasing debt to income ratios, payments shock for borrowers leaving fixed rate loans, increasing arrears and repossessions and the return of lender losses for a while now. It’s not us being ‘doom and gloom’ merchants – it’s us being realists.
FCA complaints – a worsening picture
Increasing numbers of complaints, and the lack of real resolution by firms, is not new news, but regulators are becoming impatient for change. After years of TCF and more recently Consumer Duty implementation, it is not surprising that they are questioning when they will see improved outcomes. So why are regulators becoming increasingly tired with […]
Later Life lending – regulatory update
The FCA published the results of its multi-firm work on later life mortgage advertising and advice, which can be summarised as “action is needed to ensure good outcomes for later life borrowers”. However, surprisingly, some commentators have dismissed the urgency of any resulting action suggesting there is “nothing to see here” and that the FCA hadn’t said anything new.
Mortgage Charter Independent Oversight
The FCA has released its first report analysing the impact of the Mortgage Charter. Launched exactly a year ago, the Charter received some negative industry comment, with a number of lenders suggesting that they already had robust forbearance measures in place and it wasn’t needed. However, on any measure, the FCA data shows positive consumer […]
Consumer Duty – can you defend your position?
When our prudential regulator calls out a potential conduct issue, while at the same time deferring to the conduct regulator, we should all recognise a problem is brewing!
