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MPs heap pressure on FCA chief to explain mortgage prisoners’ situation

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  • 03/03/2020
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MPs heap pressure on FCA chief to explain mortgage prisoners’ situation
MPs have called for FCA chief executive Andrew Bailey to clarify the regulatory differences which are allowing unregulated lenders and funds to treat mortgage prisoners differently to regulated borrowers.

 

The move puts pressure on Bailey to act on the mortgage prisoners’ situation just before he is due to take over from Mark Carney as Bank of England governor later this month.

The call comes after a meeting last week between the regulator, MPs on the All-Party Paliamentary Group (APPG) on Mortgage Prisoners and the UK Mortgage Prisoners campaign group.

In a letter to Bailey, Seema Malhotra MP, co-chair of the APPG on Mortgage Prisoners, asked for clarification over the differences in the rights of borrowers.

“It would be most helpful if you were able to set out for us what the key differences are and the practical implications for customers that are held by a ‘normal’ regulated lender and an unregulated fund,” Malholtra wrote.

“You also stated that the powers that the FCA currently has are insufficient to deal with unregulated funds, even when they are administered by a regulated entity. I would be most grateful for further clarification.

“Unfortunately, we find the fact that a fund is administered by a regulated entity obfuscates and confuses the true nature of the relationships,” she added.

Malholtra also urged Bailey to use examples of how and why customers whose mortgages had been sold to different lenders were treated differently.

 

‘Fair treatment’

Campaigners echoed Malhotra’s sentiment that the meeting was “positive” but added that their situation “has been so poorly addressed by various bodies that this confusion has translated into unfair treatment”.

The group said the difference between those with unregulated lenders caused confusion and unfair treatment, compared with those in regulated firms.

Lead campaigner Rachel Neale called for clarification on what the “clear differences” are between regulated and unregulated businesses to “ensure fair treatment”.

“We need a clear breakdown of what protections customers should expect so that we can ensure our members are treated fairly and can raise concern when this does not materialise,” she said.

 

FCA to reply

The Financial Conduct Authority told Mortgage Solutions that it was taking the letter seriously.

FCA spokesman said: “This is an important issue on which we are in close contact with the APPG, and we will be replying.”

 

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