On 31 July 2015, the FCA published a policy statement (PS15/20) on the consequential changes to its Consumer Credit sourcebook (CONC) in light of the UK implementation of the Mortgage Credit Directive (2014/17/EU) (MCD). Following its consultation in February 2015 on the wider proposals relating to CONC in CP15/6, in PS15/20 the FCA reviews the main issues arising from the MCD elements of CP15/16 and publishes the final rules.
In summary, the FCA has made a number of changes to the draft rules in CP15/6 relating to the implementation of the MCD, but it does not consider the rules significantly differ from the draft rules.
The final rules are set out in the Consumer Credit (Mortgage Credit Directive) Instrument 2015 (FCA 2015/42) and come into force on 21 March 2016 (except Part 1 of Annex A (transitional provisions), which comes into force on 21 September 2015).
The FCA and HM Treasury have confirmed that the administration of first charge mortgages regulated by the Consumer Credit Act 1974 (CCA) should become a regulated mortgage activity. In light of this, HM Treasury is considering further changes to the legislation and the FCA will consult on possible further changes to the rules later in 2015.
In September 2015, the FCA intends to consult on minor changes to the Handbook to address outstanding issues relating to MCD lending not secured on the home, including whether to amend the definition of "credit related regulated activity" to include the activity of advising borrowers in respect of this type of lending and whether to apply the cancellation rights in CONC 11.
A response to the non-MCD aspects of CP15/16 is expected to be published later in 2015.