On 10 August 2021, the UK Financial Conduct Authority published a portfolio letter it had sent to mortgage third party administrators.
This letter sets out that the FCA considers there are three areas of potential harm:
– customer treatment: firms need to particularly focus on vulnerable customers, ensuring appropriate forbearance and giving customers clear information on their complaints and why they are being pursued for debt.
– operational resilience: firms need to have adequate systems and controls, processes and policies in place, and the appropriate governance and oversight, to mitigate the risk of operational events.
– prudential resources: liquid resources are critical for a firm’s survival.
The FCA’s areas of focus for supervision will therefore be on:
– fair treatment of customers;
– vulnerable customers;
– operational resilience;
– financial resilience;
– forbearance and due consideration;
– senior managers and certificate regime;
– the FCA’s supervisory strategy; and
– regulatory reporting.
Whilst the focus of this letter is on mortgage third party administrators, other third party administrators (particularly those involved in consumer credit) read this portfolio letter and consider whether any further steps should be taken.
The FCA also wrote to firms outsourcing their mortgage activities reminding them of their obligations.
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