The Equity Release Council has issued its response to the FCA’s policy statement on lifetime mortgages and the implementation of the Mortgage Credit Directive.
Nigel Waterson, chairman of the Equity Release Council, said: “The Financial Conduct Authority’s (FCA) decision to retain and supplement its existing Handbook definition of lifetime mortgages is positive news both for the industry and the growing ranks of consumers who have a need for these products.
“The FCA’s common sense approach to the implementation of the Mortgage Credit Directive (MCD) will help avert a situation where any future development of products requiring elements such as capital repayments might not come with the same level of specialist advice or detailed information required of other lifetime mortgages, thereby protecting consumers.
“Upholding standards of advice and protection is vital so that customers can make fully informed choices and be confident in their decisions. The Council has campaigned long and hard to establish these principles as the bedrock of the modern equity release industry. With MCD implementation looming, we are encouraged by moves to ensure the ESIS is supplemented by extra information for lifetime mortgages within the remit of the MCD so customers fully understand the risk factors involved.
“We also welcome the fact that the FCA has expressed an openness to engage with firms considering innovations that serve consumer interests, to encourage new product developments through future regulatory changes. Provider innovation, resulting from consumer demand, will play a vital role in the market’s growth and in helping people to finance their later life. We look forward to continuing our constructive dialogue with the FCA to support these efforts for the benefit of consumers.”