FCA policy statement sets out final changes to mortgages responsible lending rules and guidance

Regulatory Updates | 28/10/19

The Financial Conduct Authority (FCA) has published policy statement PS19/27, Changes to mortgage responsible lending rules and guidance – feedback on CP19/14 and final rules.
In PS19/27 the FCA sets out the final changes to on mortgage responsible lending rules and guidance, consulted on in CP19/14 between March and June 2019. In CP19/14, the FCA set out its concerns that some consumers cannot switch to a more affordable mortgage despite being up to date with their mortgage payments.
The rule changes are being implemented largely as consulted on and will:
• allow mortgage lenders to choose to carry out a modified affordability assessment where a consumer meets certain criteria
• require mortgage lenders using the modified assessment to tell consumers the basis on which their affordability has been assessed and
• provide additional disclosures about potential risks
• require mortgage lenders to report which sales have involved the modified assessment when they submit Product Sales Data (PSD) to the FCA.
• place new requirements on inactive lenders, and administrators acting for unregulated entities, to review their customer books and develop and implement a communication strategy for contacting relevant consumers to tell them it could be simpler for them to remortgage.
All of the rule changes outlined in policy statement PS19/27 took effect on 28 October 2019.