FCA and PRA changes to mortgage reporting requirements

FCA and PRA changes to mortgage reporting requirements - PS22/19

Overview

In Consultation Paper (CP) FCA - 18/41** PRA – 30/18 (page 2 of 2) we proposed new reporting requirements which would apply to regulated mortgage lenders and home finance administrators. This policy statement summarises the feedback received and our response to it.

Overall, respondents supported our proposals and we are implementing them broadly as consulted on.

We will be extending the implementation time for the Product Sales Data report (PSD001) changes to 18 months. This is in response to feedback and other regulatory proposals affecting mortgages. Implementation timeframes for Performance Sales Data report (PSD007) and Mortgage Lender and Administration Return (MLAR) changes remain 12 months as proposed.

We plan to publish the technical documents (Data Reference Guide) in October 2019 and give firms access to the FCA’s reporting system (GABRIEL) test environment from November 2019. Firms which do not already have access can request it via the FCA contact centre.

This policy statement is directly relevant to: 

• mortgage lenders
• mortgage administrators
• entities which own mortgage books but which are not FSMA authorised 

• trade bodies
• charities and organisations representing consumer interests

This policy statement is about the information that we collect from certain regulated firms and is unlikely to be of direct interest to consumers.

Summary of responses

We received 19 consultation responses. This includes 1 response from an organisation representing consumer interests; 6 from trade associations; 8 from large firms; 1 from a medium sized building society; 1 from a small second charge firm; 1 from a credit services firm and 1 from a credit union. We also held industry liaison meetings with members of 2 different trade bodies.

Overall, respondents supported the proposed changes. Firms and their trade bodies generally agreed the data should help us meet our objectives and carry out our functions. Most respondents also agreed with our proposed methods for collecting the data. There were some exceptions to this, notably from 1 trade body and those responding from the credit union sector. Their concerns are considered in this policy statement.

We are implementing our proposals broadly as consulted on. However, we are making several changes of detail due to the feedback received. For the performance data report (PSD007), we are introducing data items which will give us a clearer understanding of how mortgage books are held (without unduly burdening firms). We are also making changes to clarify and simplify the intended content.

For the sales data report (PSD001), we have changed some of the data fields to clarify the intended content and have reduced the number of data fields which need to be completed for internal product transfers. We have also added an additional field about the rates used for affordability tests where firms have ‘stepped rate’ products. This is in response to feedback from a firm and a large trade association.

Finally, we are making a minor consequential change to the guidance notes and a data field label on MLAR, due to feedback about the sales data report (PSD001) changes. 

Implementation

• 12 months following publication of this policy statement to implement the performance sales data (PSD007) and MLAR changes
• 18 months following publication of this policy statement to implement the product sales data report (PSD001) changes

Implementation timescales

Policy Statement 22/19

Appendices

• Appendix 2: PRA RULEBOOK: REGULATORY REPORTING (MORTGAGE REPORTING) AMENDMENT INSTRUMENT 2019 (pdf)

As part of PS22/19 the PRA has also published updated versions of the:

• Notes for completion of the Mortgage Lenders & Administrators Return (MLAR); 
• MLAR form; and 
• Updated SS34/15 ‘Guidelines to completing regulatory reports’, which includes a link to the notes for completion of the MLAR. 

FCA and PRA changes to mortgage reporting requirements - CP30/18

Update 29 May 2019: At the time of publication, the PRA and FCA expected to issue the final policy in mid-2019. We are currently working on the final policy, and expect to publish rules in a joint Policy Statement in Q3 2019. The ‘Responses and next steps’ section below has been updated to reflect this updated timeline. 

The Prudential Regulation Authority (PRA) and Financial Conduct Authority (FCA) have published a joint consultation paper (CP) on proposals for new reporting requirements that would apply to mortgage lenders and home finance administrators.

Published on 13 December 2018

Overview

In this joint Consultation Paper (CP), the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA) set out proposals for new reporting requirements that would apply to mortgage lenders and home finance administrators. The CP contains proposals made solely by the FCA in relation to its objectives as well as joint proposals that are given effect through a combination of PRA and FCA rules. To make the proposed requirements clear for firms, the proposals are presented under the relevant reporting return or template. 

This consultation will be directly relevant to

• Mortgage lenders
• Home finance administrators
• Entities which own mortgage books but which are not authorised to lend

This consultation will also be relevant to stakeholders with an interest in the mortgage and home finance market, including:

• Trade bodies representing home finance firms
• Charities and other organisations

Responses and next steps

The FCA and PRA invite feedback on the proposals in this paper. Please send any comments or enquiries by Friday 22 March 2019 to cp18-41@fca.org.uk.

The FCA and PRA will consider your feedback and publish rules in a joint Policy Statement in Q3 2019, and plan to offer firms an implementation period of a year following that publication.

Consultation Paper 30/18