In a discussion paper published today, the FCA sets out some of the factors that are considered relevant when assessing changes to mortgages contracts and asks for views on its current approach to fairness.
‘Consumers have a right to be treated fairly if their lender changes a term of their mortgage contract,’ said Clive Adamson, director of supervision at the FCA.
‘It isn't always clear though to consumers how lenders and the FCA assess fairness in this area. This paper gives an opportunity for firms and consumers to give their views on what fairness means when changes are made in the terms of this very important financial product,’ he added.
As well as inviting discussion about the operation of the current regulatory framework. There are several options for potential further action. These include providing clarity and transparency about the FCA approach to fairness and further guidance on current rules but with no changes to the current regulatory framework.
Other options include introducing new rules, for example, around the information that firms must provide to a consumer or restricting the changes that a lender could apply to mortgage contracts.
This debate will also form part of the wider work the FCA is undertaking to understand consumer expectations and how the industry can better meet the information needs of consumers.
The FCA is keen to engage with both the mortgage industry and consumers during the discussion period. Interested parties can send their views directly to the FCA. The FCA intends to have face to face meetings with consumer groups, firms and trade bodies.
