Financial Conduct Authority chief executive Andrew Bailey has said the regulator will “get on with” addressing issues affecting mortgage prisoners.
Bailey has said the affordability assessment test is under consultation to be changed from an absolute test to a relative test and that there is “no reason to hang around” on the decision.
This comes after Bailey wrote a letter to Morgan last week, raising concerns of the on-going mortgage prisoner issue, which the FCA estimate 140,000 people are currently facing.
The present affordability assessment rules, make it difficult for borrowers who have been moved to reversion rates to switch to a cheaper mortgage deal.
There are reportedly 10,000 mortgage prisoners with active lenders who are in need of being moved onto a more competitive deal, according to chair of the treasury committee Nicky Morgan.
Bailey says: “There is no reason to hang around on this decision, so we will get on with it.
“The relative versus the absolute test has the benefit that it is a principle to go forward with and anybody should benefit from that, it shouldn’t be a question of when the customer took the mortgage out.”
“The rule could be changed quickly, because this is a change of process rather than a firms’ change of system which takes much longer.
“The response from the industry was a lot of good will and a desire to solve this. We have 95 per cent of the lending community signed up to deal with this.”
However, the change in the affordability assessment test is unlikely to solve the issue for customers in long term arrears, according to Bailey.
Furthermore, the FCA intend to hold a consultation on whether it should ban lenders charging higher fees on unarranged overdrafts.
Bailey comments: “The charge should fairly represent the amount withdrawn and take into consideration the time period.”