FCA considers new regulation for unauthorised mortgage lenders

The FCA is considering a change in regulation to protect mortgage prisoners of inactive or unregulated lenders.

Related topics:  Mortgages   |   Rozi Jones
|
6th November 2018
Christopher Woolard FCA
" It simply isn’t an acceptable argument to hide behind the intricacies of our regulatory perimeter when real families are involved."

Speaking today at UK Finance's annual conference, FCA director Chris Woolard said he would like "to see an answer in the unauthorised space" and said the FCA has formed an industry working group to help mortgage prisoners switch to another lender.

Woolard said the regulator has identified about 20,000 customers in the closed books of authorised lenders and a further 120,000 whose mortgages are held by unauthorised firms who may benefit from switching.

He added: "If need be we will also discuss with government whether a change in our regulatory perimeter or any other government support is needed to protect those customers where mortgages are transferred to the unregulated sector. It simply isn’t an acceptable argument to hide behind the intricacies of our regulatory perimeter when real families are involved."

Woolard said the FCA is looking to improve its regulation relating to mortgage prisoners and is considering how it can provide "additional flexibility".

However he said there also needs to be "a willingness from industry to offer remortgaging opportunities to those who currently don’t seem to have them".

Woolard concluded: "For some their specific circumstances will mean that no lender is likely to consider that a new mortgage is an appropriate risk. But it’s clear this isn’t the case for all those who find themselves trapped. So we expect firms to engage with this work as we move forward, and to consider the opportunities to take on these customers."

More like this
Subscribe
to our newsletter

Join a community of over 30,000 intermediaries and keep up-to-date with industry news and upcoming events via our newsletter.