The countdown to MCD

It goes without saying that 2016 is a key year for the secured loans industry. Since April 2014, when the Financial Conduct Authority first took over the reins of regulation for the second charge sector, we have been working towards this point when the interim permission period ends and MCD regulation comes into effect.

Steve Walker
8th February 2016
Steve Walker Promise Solutions

As pipeline cases will need to be completed by March 21st the general consensus is that MCD will be adopted by mid-February.

Key to a smooth transition will be lender technology. As we move towards an advised process lenders have had to update their systems with new documentation, new rules and new affordability calculators and these new systems will have to be ready in the next few weeks.

The good news is it seems lenders, on the whole, are on target for getting their internal systems ready. From conversations we’ve been having it seems the vast majority of lenders are aiming to be good to go by early to mid February.

However, internal systems are just one area that will need addressing. Also important - certainly in terms of benefiting brokers - is XML integration. For brokers to sell seconds on an advised basis smoothly and efficiently lender integration will be key. Lender and master broker systems should talk to each other and, while some lenders are making great headway with this, others are lagging a little behind.

As for introducing brokers, the countdown is on to get your cases submitted and completed before the deadline. But be warned, with lenders preparing to adopt MCD earlier than March 21st, in reality you have just a couple of weeks to submit your cases under the current criteria. Come next month any deals not completed will need to be resubmitted with new criteria within the new advised sales process and, under those new rules, many cases will no longer fit.

It’s going to be a busy few weeks!

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