FCA has published its Dear CEO letter for the lifetime mortgage provider sector. Its last letter was in October 2020. The latest letter:
- highlights (as other sectoral letters have done) the impact on vulnerable consumers of the risking cost of living, and FCA’s concerns that consumers who are facing financial stress may be more susceptible to the purchase of unsuitable equity release products;
- notes the risks to consumers of poor product design and governance and failure to properly treat customers in accordance with FCA rules;
- reminds firms of the importance of operational controls and the importance of strong policies for dealing with intermediary business;
- stresses the importance of liquid financial resources and financial resilience; and
- highlights key consumer considerations including the introduction of the Consumer Duty, as well as the existing obligations of TCF, product design and governance, fee and pricing structure, relationships with intermediaries, responsible lending and post-sale systems and controls.