3. FCA chief says easing mortgage lending rules risks more defaults
In January, the FCA’s chief executive, Nikhil Rathi, urged politicians to define acceptable consumer harm, warning that easing mortgage rules could increase defaults and fraud.
This came after the FCA responded to government calls for regulators to support growth in the mortgage market, outlining a series of regulatory changes it plans to introduce in 2025.
Speaking at the House of Commons, Rathi warned: "One or two things are going to go wrong here and not everybody is going to play completely by the rule book, and is there acceptance of that?
"Last year, the Mortgage Charter was introduced because there was a political consensus around not having defaults and repossessions, and we were asked to do everything we possibly could... to keep people in their homes and stop them defaulting. That's not going to be compatible with relaxing lending standards."
Discussing what is an "acceptable range of failures" relating to defaults and repossessions, Rathi asked the committee: "If the numbers went up from 1,000 to 2,000, if we relax lending standards, would that be an acceptable outcome here in Parliament, or would you say to us 'Why on earth have you let it go up by 100%?'"
