An FCA consultation paper said that non-advised applications already in progress on the MMR implementation date of 26 April 2014 would be allowed to continue for a further three months.
The regulator said the move would protect customers from ‘unnecessary delays or costs’ but that all other aspects of the MMR would apply following the implementation date.
The FCA said that firms would be able to implement many of the new MMR standards ahead of schedule if they wished to avoid the transitional arrangements.
“[Lenders] are concerned that if a change was made to the application, they would have to apply the MMR rules, which could mean a non-advised application now becomes advised,” the regulators consultation paper said.
“Firms questioned whether this was in the customer’s interests as it could add delays to the process and increase costs.
“We have concerns about allowing a further three-month transitional period as it could enable applications prevented under the new rules to proceed, which would undermine the protections the MMR provides consumers. However, we also see the case for allowing a transitional provision to ensure the consumer does not suffer from unnecessary delays or costs.
“Therefore, we propose to allow non-advised applications, received by the lender prior to 26 April 2014, to continue to be processed on a non-advised basis if a change is made, for a further three months. All other aspects of the MMR, including responsible lending, will apply to these applications.”
