Lenders face loan fines
The changes implemented by the FCA’s MMR could see lenders facing fines, for loans that are deemed to be ‘irresponsible’.
Director of British Money, Alexander Burgess said: “MMR comes into force at the end of the month and amongst its reforms are calls for a ‘common sense’ set of measures to help ensure borrowers can meet the repayments of the mortgage they want, both now and in the future.
“The FCA believes this will help it meet a key objective: to secure an appropriate degree of protection for consumers.”
Whilst these new measures are currently not set in stone, Burgess suggests they should include payment protection insurance.
He added: “Very few lenders now offer this cover and this has provided a huge protection gap.
“By reintroducing revamped cover into the market, it will cut the proportion of delinquent loans on lenders’ books, reduce the likelihood of an FCA investigation into lending criteria, and provide clients with a valuable financial safety net that provides evidence of how the lender adds value and treats customers fairly.
“The FCA’s 2013/2014 Business Plan underlines that a key risk is that firms do not design products or services that respond to real or services that respond to real consumer needs or long-term interests.”