The fines keep coming….
Less than a month ago we wrote about the ‘cost of non-compliance’ exceeding £1bn for poor arrears handling, through FCA fines and redress. Since then, we have seen yet another one. It is clear to us that the FCA is fining firms to drive home the need for a behavioural change in the way lenders treat their customers and arrears strategies.
FCA fines approach £1bn for arrears breaches
Following the most recent FCA lender fine, conversations with our business partners have been ‘off the scale.’ Everyone is shocked that collection teams are still getting it so wrong. FCA fines for the poor treatment of arrears and vulnerable customers is nothing new, and although they appear to relate to historic cases, be in no doubt, everyone is starting to question their own policies and procedures – again.
SRT and Basel 3.1 – are you ready?
We are often asked by our clients to comment on market trends and movements. Significant Risk Transfer [‘SRT’] is currently dominating our conversations, and much of our work, especially our AUP services connected with SRT issuance programmes. 12 September 2024 is a key date that will lead to a seismic market shift – are you ready?
Niche lenders, back in the driving seat?
The UK lending market is in the grip of a seismic shift, driven by significant M&A activity, choices being made by laggards in the digital transformation race and the regulatory impact of tightening capital requirements.
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 outcomes.
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 the lack of progress and what is behind their increasing frustration?
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 is a combined warning as it highlights common potential consumer harm issues in each portfolio.
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.
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 products ahead of the Consumer Duty coming into force. But the clock is also ticking for closed products which will come under the scope of the Consumer Duty at the end of July.”
UK RMBS is alive and well
We have noticed recent trade press commentary stating “UK RMBS is back”. Clearly positive news, but in our view, it has never been ‘away’. To be clear, when commenting on UK RMBS we need to distinguish between, and consider the position of, ‘non-bank’ and ‘bank’ providers.
