Busy Lenders' Monthly Round-Up - April 2017

Welcome to TLT's Busy Lenders' Monthly Round-up. Each month we summarise the latest news and developments in retail mortgage lending and regulation.

News

BOE demands regulator ends reliance on "mega-fines"

Mark Carney has called on regulators to end their alleged "over reliance on mega-fines" as they seek to deter misconduct in the financial services sector.

Instead, the Governor suggests that greater responsibility is placed on individuals within the banking sector, in order to bring about a cultural change in the way banks are run.

Speaking at the Institute of International Finance's Washington Policy Summit, Mr Carney urged regulators across the world to shift their focus to forecast based incentives, as an alternative to the threat of significant fines imposed after the fact.

Mr Carney also spoke of the need to avoid the fragmentation of global markets during the UK's Brexit negotiations. His view is that the UK and the EU have a highly developed system for supervisory cooperation and there is an opportunity for this system to remain in place following the nation's exit from the European Union.

CML decries micro-management by regulator

Paul Smee, director general of the CML, used the annual CML Scotland lunch to challenge the regulator to take a proportionate approach to the data it requests from lenders. His position is that micro-management of markets is usually ineffectual and could detract from lenders' efforts to get on with business and put their customers first.

Mr Smee went on say that whilst the CML is due to merge with the British Bankers Association later this year, he did not anticipate any change to mortgage lenders' representation in the market place.

Carol Anderson, chair of the CML in Scotland, also used the event to challenge the Government to deal with the housing crisis, which she said needs to be resolved in order to meet the aspirations of first time buyers both north and south of the border.

UK Finance trade body launched and CEO named

UK Finance has announced that Stephen Jones will be its first CEO. Mr Jones has over 30 years' experience in the financial sector, having worked with Santander, Barclays, Citigroup and Cerberus.

As we reported last month, UK Finance is the new trade body for UK finance and banking and will incorporate six of the largest trade associations, namely: Asset Based Finance Association, British Bankers' Association, Council of Mortgage Lenders, Financial Fraud Action UK, Payments UK and the UK Cards Association.

The trade body is expected to play an important role in representing the interests of the UK financial industry during the Brexit negotiations. UK Finance will be based at Angel Court in the City and remains on course to launch later this Summer.

Will the 'Lisa' take off?

The Government launched the Lifetime Isa (or Lisa) in early April to further assist first time buyers in getting onto the property ladder.

The product is designed to enable savers to put money aside towards their first house purchase or their retirement. It is available to those under 40 who can save up to £4,000 per year until they reach 50, with the Government contributing a 25% bonus (which will be lost if funds are not used for a first time purchase or retirement).

Some concerns have been raised about matters that could make the Lisa less appealing than first anticipated, including:

Confusion arising from the product's disparate dual purposes Rising prices making properties unaffordable even with the 25% bonus The narrow range of products available as banks assess the regulatory burden of offering Lisas (at present sales do not have to be advised) The number of products on the market for first time buyers, including shared ownership and Help-to-Buy The risk that Lisas...