Speaking at the Association of Short Term Lenders (ASTL) conference, the regulator warned that poor underwriting standards from non-PRA regulated firms would not be tolerated.
FCA technical specialist Lorna O’Brien noted that the PRA portfolio lending supervisory statement only applied directly to PRA regulated firms, typically the biggest lenders.
As Mortgage Solutions has reported, some non-PRA regulated lenders, such as Vida Homeloans, have decided to work to the incoming rules despite not being compelled to do so. Meanwhile others have decided not to change criteria to match the new rules.
O’Brien told the conference: “We are considering our approach for solo regulated firms, which means firms we regulate prudentially rather than the PRA, and that will probably include most regulated bridging lenders.
“We are considering the extent poor underwriting standards by solo-regulated firms might compromise our objectives, in particular our objective to protect and enhance the integrity of the UK financial system.
“So we are mindful of the risks that poor standards of lending could emerge in firms not subject to the PRA’s requirements, so will be actively monitoring the sector to see if there is any case for intervention,” she added.
