The Financial Conduct Authority (FCA) issued a consultation paper recently setting out proposed amendments to the mortgage data currently reported by mortgage lenders to the regulator.
The FCA wants to collect additional data about mortgages to monitor and supervise conduct in the mortgage market, given the changes in mortgage regulation that are coming into effect on 26 April 2014 as a result of the Mortgage Market Review (MMR).
The MMR introduces a package of reforms to the mortgage market following a comprehensive review of the mortgage market by the Financial Services Authority (FSA) predecessor to the FCA. The final rules introducing the MMR package of reforms include a focus on responsible lending and new prudential requirements for non-deposit taking mortgage lenders.
The amendments proposed by the FCA relating to mortgage data provided on new home loans include:-
- details of each borrower’s income, such as bonuses and overtime pay
- information on household spending and other commitments such as maintenance and child support
- total outstanding credit commitments such as loans and credit cards
- whether the borrowers have any financial black marks against them, such as loan arrears or county court judgments
- the number of dependent children they have
- the age at which they are planning to retire
Data relating to existing mortgages would be less detailed but would include the property’s postcode and estimated valuation plus information on mortgage balance outstanding and any arrears.
In the consultation paper the FCA states “we want to be a more forward looking and pre-emptive regulator, seeking to identify and head off risks before they crystallise and cause consumer detriment or damage to market integrity. We also want to maintain competitive markets and promote effective competition in the interests of consumers. The enhanced data will help us to identify if there are risks to these objectives.”
The FCA has also acknowledged in the consultation paper that it will comply with the principles of the UK Data Protection Act 1998, the guidance issued by the Information Commissioner, section 6 of the Human Rights Act 1998 and Article 8 of the European Convention on Human Rights, in particular ‘the right to privacy’.
The FCA intends to share the data with the Bank of England and the Prudential Regulation Authority.
The consultation period ends on 15th August 2013. Consumers can give their views either using an online form or in writing
http://www.fca.org.uk/your-fca/documents/consultation-papers/cp13-02-response-form
