FCA should leave fintech alone: UK Finance

UK Finance director of mortgages Jackie Bennett gave a speech at the trade association’s annual mortgage dinner on 3 December, in which she stated a hope for the FCA to take a hands-off approach to the direction of travel of fintech.

Pointing to the forthcoming publication of the regulator’s mortgage market study, due in the first quarter of 2019, Bennett said, “One of the things I hope the final report doesn’t say is what the direction of travel on fintech should be.

“There are some interesting and exciting developments in this area with more to come in the next few months and it would be a shame if the regulator inadvertently cut across allowing this market to develop in its own way to meet market needs,” she added.

The speech as a whole was wide-ranging and looked back at a busy year and what Bennett saw as key events in UK Finance’s calendar for 2019.

Aside from the aforementioned report, Bennett listed seeing the CMA’s response to the Citizen’s Advice Super Complaint, drafting a response to the FCA’s fair pricing discussion paper, and looking out for the regulator’s paper on vulnerability as expectations for next year, along with continued work on the understanding of the impact of the transition from LIBOR to SONIA, which is marked for the end of 2021.

“We know that some customers are on LIBOR-linked mortgages and it is vital that there is a smooth transition for them,” Bennett commented.

Bennett also touched on Brexit, saying that: “UK Finance and the industry have worked closely with the FCA and government to mitigate the cliff edge risks associated with a ‘no-deal’ Brexit.

“However, a no-deal outcome would still cause significant disruption for firms and their customers on both sides of the Channel, which is why we strongly support a managed exit together with an appropriate implementation period. Parliament now has a responsibility to prevent a deeply damaging no-deal Brexit.”

Victories in 2018 included, Bennett said, delivery of a voluntary industry agreement with the BSA and Imla to help existing borrowers on reversion rates.

“However,” she added, “there are thousands more customers with inactive lenders or unregulated owners that we are currently unable to help, even if they can demonstrate they are successfully making higher payments.

“We continue to explore with the FCA what might be possible for these customers.  But this is likely to require Handbook changes at the very least, and possibly legislative changes. We know the FCA and Treasury are actively considering this important issue.”

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