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Dear CEO | Release Date: 11th March 2022

To read a longer summary of this Dear CEO letter, click here.

To access the original FCA document, click here.

Short Summary

The Financial Conduct Authority (FCA) has communicated a strategic overview for Non-Bank (Mortgage) Lenders (NBLs), reflecting on the challenges posed by the COVID-19 pandemic and outlining a forward-looking supervisory strategy. The letter acknowledges the pressures experienced by firms due to economic disruptions and praises the adaptive measures taken, particularly the implementation of the Tailored Support Guidance, which helped provide necessary forbearance to consumers.

The FCA is enhancing its approach to supervision by leveraging technology and data more effectively, ensuring rapid and decisive responses to market changes. This transformation is part of an effort to ensure that firms are equipped to handle potential future challenges, including the end of furlough schemes, rising interest rates, and the ongoing financial stresses that consumers may face.

Key areas of focus for NBLs include:

The FCA expects NBLs to actively manage these risks, ensuring that their practices are aligned with regulatory expectations and that they are prepared to demonstrate compliance. This includes continuous engagement with customers, particularly those in vulnerable circumstances, to ensure fair treatment and support through potential financial difficulties.

Key Take-away: 

NBLs must prioritise consumer protection, maintain high standards of operational resilience, and prepare for regulatory changes while continuing to support customers facing financial challenges. Compliance with these areas will be crucial in upcoming FCA evaluations.

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