The regulator said in its monthly meeting for June that it was eager to communicate its views on Standard Variable Rate (SVR) changes and other issues of fairness in the market.
This is in response to the Bank of Ireland’s decision earlier this year to raise the differential on its tracker mortgage rates. This move prompted threats of legal action from borrowers affected and the bank subsequently gave 1,200 borrowers a reprieve.
A presentation given to FCA chiefs in its most recent board meeting outlined the options for the regulator and it subsequently decided to issue a paper on the matter.
“The executive recommended publishing a discussion paper inviting comments about the best way to balance firms’ contractual rights and consumers’ reasonable expectations and communicate the way in which the FCA might intervene to prevent firms from varying their mortgage contracts against reasonable expectations,” the minutes said.
“The board agreed with the executive proposal to finalise a discussion paper on fairness in mortgage contracts and to circulate to the board prior to publication.”
Earlier this week Mortgage Solutions reported that landlords affected by the Bank of Ireland rate rise may be able to sue brokers if the regulator does not intervene.
