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Mortgage firms set for FCA cashback windfall


Brokers and lenders could get an unexpected yearly windfall from the FCA under the regulator’s plans to pay firms a percentage of mortgage fines.

Currently, any fines coming from breaches of the Mortgage Credit Directive are passed directly to the Treasury.

But in other areas of finance, the FCA returns some of the cash from fines to compliant firms to help offset rising regulatory costs.

For example, financial advisers in the A.13 fee block got £4.4m paid to them by the FCA last year.

The regulator now plans to apply this idea to MCD fines, according to today’s CP17/38 consultation.

How much mortgage firms would get is still unclear. The FCA sets the exact amount to be refunded yearly, and will do so in March 2018.

Lender bills

However, some mortgage lenders will see their FCA bills go up under other new proposals from the regulator.

The changes would see lenders go from paying £16.50 for every £1m of their secured debt to £18.39.

The FCA is also proposing that mortgage lenders pay more to fund the Money Advice Service.

Lenders are part of the regulator’s ‘home finance’ provider’ group, which paid £21m of the total £48m 2017/18 cost of running MAS.

The regulator is proposing to raise this to £24m for 2018/19, an increase from 44 per cent to 50 per cent of the total.

The other 50 per cent will be paid by consumer credit lenders under the FCA’s suggested new rules.

The FCA wants to make the changes to stop companies such as credit card firms from doing large amounts of unsecured lending but not paying their fair share towards MAS.

The regulator adds: “Our proposals align the funding of debt advice more closely with the actual lending firms do, but it will mean some firms will pay a larger levy than they do now.”


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