Strict rules on how mortgage information is disclosed to borrowers are “too prescriptive” and prevent firms from taking a more tailored approach, some businesses have argued.
The FCA has today published stakeholder feedback on its consumer duty requirements and how these are working alongside other regulations.
It says: “Several respondents said the current mortgage disclosure rules are too prescriptive.
“They said these rules limit firms’ ability to tailor information to meet customer needs and to adapt to changing consumer preferences, such as using digital sales channels.
“Respondents noted that, while the rules aim to reduce risks of harm, in practice, some of our rules could hinder firm innovation and consumer understanding.”
The regulator says that work is already underway to review responsible lending and mortgage advice rules to simplify and align these with the consumer duty requirements.
As part of this work, in May the FCA will consult on proposals to make it easier for borrowers to remortgage to a new lender; reduce their mortgage term and to discuss their options with a firm outside the regulated advice process.
Then in June, the FCA plans to publish a discussion paper covering risk appetite; alternative affordability testing and product innovation; later life lending and consumer information.
