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Shawbrook admits failings on certification of affordability

  • 09/02/2018
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Shawbrook admits failings on certification of affordability
Shawbrook has admitted it was reprimanded by the Financial Conduct Authority (FCA) over some of its affordability and stress testing practices.

Specialist Lending Solutions understands that Shawbrook has seen a significant reduction in lending volumes since the regulator forced it to make changes to its lending policy in October.

The lender confirmed to Specialist Lending Solutions last week that it had been recalibrating its risk appetite after the FCA conducted its second charge review late last year, but said this had been done as part of a wider dialogue with the regulator within the review.

However, it has now admitted to that it was told directly by the regulator that its processes were not suitable.

Shawbrook chief executive Steve Pateman (pictured) confessed that the regulator had reprimanded the bank, telling it to “tighten up income verification”.

The lender had been accepting accountant’s certificates as sufficient evidence of income prior to the FCA review, but these do not typically include all the information required to ascertain a full understanding of a client’s income.

The regulator also highlighted problems with Shawbrook’s stress-testing for self-employed customers.

In an email to brokers last week, Pateman apologised for the problems the changes had created for customers and brokers.

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