22 Jul 2015
The Financial Conduct Authority (FCA) have issued a Policy Statement in response to their February 2015 consultation paper – CP15/3 – on their proposals for implementing the Government’s framework for buy-to-let mortgages under Part 3 of the Mortgage Credit Directive Order 2015.
In their paper, the FCA set out four areas which they wished to target to implement the legislative framework; the registration process, collection of aggregated data, widening of the Financial Ombudsman Service's (FOS) compulsory jurisdiction to cover complaints handling for buy-to-let mortgages; and modifications to other handbook modules to incorporate buy-to-let mortgages.
The FCA report ‘broad support’ for the proposals made by them in CP15/3 and that respondents recognised that the scope of the consultation was in line with the powers conferred on the FCA by legislation.
However, the Council of Mortgage Lenders (CML) was critical of the drafting of the proposals; citing four areas of concern. CML director general Paul Smee stated: "The Directive provides little if any benefit to UK consumers or the operation of the market. We believe that both the government and the regulator share this view. So, while we naturally recognise the need to comply, we believe that the UK should do so in a pragmatic way that disrupts the existing robust regulatory regime as little as possible."
Under the new legislation, lenders who wish to engage under the buy-to-let scheme will need to be registered by the FCA to do so. There will be an application form and a fees relating to this. In relation to this, the FCA will be conducting a March 2016 consultation paper on the periodic fees and FOS general levy.
The FCA has recently published a thematic review focusing on the level of compliance with existing Consumer Credit Sourcebook rules as based on the Office of Fair Trading’s former Debt Management Guidance.
The aim was to learn whether debt-management firms, particularly those charging fees, are providing advice that is in a customer’s best interests and whether they are actually reducing the risk of further indebtedness.
The FCA reviewed a combination of fee-charging and free-to-customer debt management firms operating in the UK.
Find out more: Eversheds - Quality of debt-management advice
New Financial Conduct Authority (FCA) and Financial Ombudsman Service (FOS) rules came into effect from the 9th July 2015.
The FOS will be able to consider complaints made directly by a client, where your firm has not investigated the complaint. However, this will only be permitted if both you and the client consent. If you do consent to the FOS handling a complaint directly, you must still comply with your existing obligations under the dispute resolution rules. For example, you must still notify the client of a final response or explanation of the current position if the FOS fails to resolve the complaint by the end of the 8 week period.