PRA Letter re Fixed Rate Lending Guidelines

The PRA has published a letter which Mel Beaman has sent to the CEOs of non-systemic building societies clarifying the fixed rate lending guidelines.

The letter, which follows a request from the Building Societies Association to put in place a 6 month suspension of the guidance on fixed rate lending limits in the ‘Specialist Sourcebook’ confirms that whilst the Sourcebook is guidance and not rules, it has been agreed that a 6 month suspension will indeed be in place until 31 January 2021.

The PRA’s one condition is that any self-administered extension is limited to 10% above the lower of the Sourcebook benchmark or the Society’s current limit.  The PRA reminds Societies of their need to inform the PRA of any such changes,, together with copies of the board minutes approving the changes (and showing the relevant risk assessment has been undertaken).

Emma Radmore