Lending Standards Board consults on its review of the access to banking standard

On 8 June 2021, the Lending Standards Board published a consultation paper on its review of the ‘access to banking standard’ (the Standard).

The Standard aims to ensure that customers are well-informed about branch closures and the options available to them if they do not have a nearby branch. The Standard came into effect in May 2017.

The overarching principle of the Standard is:

“Customers and relevant stakeholders of a bank branch that is closing will be provided with clear, understandable, accessible documentation and information about that specific closure as soon as the bank is able to do so, also what it will mean for them and how they can continue to bank following its closure.”

The LSB wishes to review the Standard’s effectiveness. This will include considering the impact (if any) of Finalised Guidance 20/3: ‘Branch and ATM closures or conversions’ and Finalised Guidance 21/1: ‘Guidance for firms on the fair treatment of vulnerable customers’.

The consultation period ends on 4 August 2021.

FCA publishes latest mortgage lending statistics

On 8 June 2021, the UK Financial Conduct Authority published its mortgage lending statistics for Q1 2021.

The FCA notes:

– the outstanding value of all residential mortgage loans was £1,561.8 billion at the end of Q1 2021 (3.6% higher than a year earlier);

– the value of gross mortgage advances in Q1 2021 was £83.3 billion (26.5% higher than in Q1 2020, and the highest level since Q4 2007); and

– the value of new mortgage commitments (lending agreed to be advanced in the coming months) was 15% higher than a year earlier at £77.5 billion.

FCA’s published board minutes show a review of its legal risk appetite

The UK Financial Conduct Authority has recently published the minutes for the board meeting held on 29 April 2021. Firms may be interested to see that the board was briefed on “concerns around whether the [FCA] has sufficient appetite for taking legal risks”.

The FCA’s board “recognised that legal risk was one of many factors to be considered when deciding on the appropriate action for the FCA to take”. It therefore supported proposals to “recalibrate the degree of legal risk the organisation is willing to take, how to implement this in practice and the inclusion of legal risk appetite/tolerance in the FCA’s Own Risk framework”.

It remains to be seen what impact this recalibration will have on the FCA’s approach to enforcement. But firms will need to remain alive to any changes to the FCA’s risk appetite.

Payment Systems Regulator consults on its proposed five year strategy

On 10 June 2021, the UK Payment Systems Regulator (the PSR) published a consultation paper setting out its proposed five year strategy.

The PSR proposes to focus on four key strategic outcomes:

– All users should have access to payment services that meet their needs in terms of functions, quality, cost and other relevant factors.

– Users’ interest must be adequately protected when using payment systems so that they can use systems and services with confidence.

– Payment systems should be designed and operated to enable effective competition in the provision of payment services.

– Payment systems should be efficient and commercial sustainable.

The consultation period ends on 10 September 2021. The PSR aims to publish its finalised strategy before the end of 2021.

Money and Pensions Service releases beta version of its MoneyHelper website

On 7 June 2021, the Money and Pensions Service published a press release saying it had released a beta version of the MoneyHelper website to share with partners and stakeholders. The website’s release will allow MaPS to continue gathering feedback and testing before its launch to consumers by 30 June 2021.

Until the MoneyHelper site goes live to consumers, MaPS’ existing websites and services will continue to be accessible.

FCA publishes information for borrowers who have LIBOR linked mortgages

On 11 June 2021, the UK Financial Conduct Authority published a new webpage giving information to borrowers who have LIBOR linked mortgages.

The webpage says:

– LIBOR is used to calculate “some interest rates” for mortgages and is coming to an end in 2021;

– if the mortgage is LIBOR linked, the lender “may need to amend its terms and conditions to change the way the interest rate is calculated”. If it does so, the lender will tell the customer (and may ask for consent to make the change);

– the new reference rate of interest could be the Bank of England base rate. But when replacing the reference rate, firms should treat their customers fairly; and

– there may be some cases where a change does not happen before the end of 2021. The FCA plans to consult on providing a temporary solution for certain products, which may include mortgages, that have not changed by that time (but such a solution will be “time-limited”).