As this unique year sees an August spike in interest in housing and mortgages, our friends at the FCA also appear to be returning to business as usual.  Having had seven days to respond to a consultation on how we should deal with people coming to the end of payment deferral, we have had four weeks to prepare our response to amendments to the deadlines for the Certification Regime and Conduct Rules.  There are also a series of other consultations all falling due in the next few weeks, one of which covers intra group switching without affordability assessments and assistance to those with interest only loans coming to end of their term.  There are also consultations on how FCA manages complaints on its own conduct and a Treasury paper on the approval of third party financial promotions.  In addition, there are deferred consultations on operational resilience, Open Finance and encouraging switching for those on a SVR.  On top of this there is the significant guidance consultation on consumer vulnerability.  This is a huge regulatory agenda which was pushed back as Covid struck, but now appears to be back on the rails.  It is normal for the agenda to go on hold over the holiday period, but this year it is escalating.

In addition to these consultations, the FCA has told firms that they have been given enough relief and should now be fully operational and therefore able to deal with all complaints within standard rules and timescales.  It has also issued all firms with a survey to assess the impact of Covid on their financial resilience.  This was issued under their FSMA Section 165 powers which makes failure to complete accurately a serious offence.

As firms struggle to meet heavy consumer demand at the same time as complying with social distancing rules and many still working from home, the pressure on firms continue to grow.  Meanwhile the regulator has announced a change in the way it regulates.  Shortly after I arrived at this trade body we had the FSA move to a more principles based regime away from the previous rules based approach.  It was not long after however that it launched its new broom of treating customers fairly and the six tenets of process and product delivery.  Then for the last three years we have had a move to the “culture of a firm and its people” being the main driver.  In the last few weeks we have had a subtle announcement in a letter to firms, which most have not seen, of the goalposts being moved to an outcomes based approach.

It was interesting to see the minutes of the FCA Board on 25 June that reported, “the Board discussed the impact on staff of the Covid-related work and agreed to consider at a future meeting how best to recognise the additional burden borne by many. In addition, the Board recognised the need to ensure that those whose personal circumstances militated against them working as effectively as normal continued to be recognised and included.”  This is at the same time as FCA guidance means our lender partners are not allowed to pay cash bonuses to their staff or dividends to their investors.  It is good that they are managing their own resources, but they need to consider the impact of their multiple actions on firms who are trying to ensure they can continue to service customer needs.

Robert Sinclair
Chief Executive, AMI
August 2020