6 Financial Conduct AuthorityMarch 2016
PS16/7 Future regulatory treatment of CCA regulated rst charge mortgages
• £5,000 before 20 May 1985
1.5 The legislation will mean that the CCA will no longer generally apply to these loans. In CP15/36
we consulted on applying our existing mortgage regime to these loans in the same way
as it applies to firms in relation to other regulated mortgage contracts, with some limited
modifications or exceptions.
1.6 In CP14/20 we consulted on the regulatory treatment of second charge back book loans
including those entered into before 31 October 2004. In PS 15/9 we confirmed our intention
to apply our mortgage regime to all second charge back book loans. However, neither the
legislation made by HM Treasury nor the rules in PS 15/9 achieved that aim; only second charge
mortgage contracts entered into on or after 31 October 2004 were brought into the regulated
mortgage regime. HM Treasury has now clarified the regulatory status of these loans, and the
rules attached to this policy statement align with the amended legislation and confirm that our
rules apply to second charge mortgages entered into before 31 October 2004.
Summary of feedback and our response
1.7 In general, respondents welcomed our proposed approach. Some had concerns or questions
about the application of certain rules to pre-2004 first charge CCA mortgages. We have
made several minor amendments to our rules in response, which we discuss in Section 2. We
believe the rules published with this policy statement do not differ from the draft published in
CP15/36 in a way which is significant.
1.8 Our draft rules and guidance were intended to apply to pre-2004 first charge CCA mortgages
from 1 October 2016, with firms able to adopt the new rules from 21 March 2016 if they
wished to adopt early. However, one respondent was concerned about firms ability to adopt
the changes by 1 October 2016.
1.9 The legislation has since been amended to make activities relating to pre-2004 CCA mortgages
regulated mortgage activities from 21 March 2017, although firms can adopt the new rules
from 21 March 2016 if they wish. We have amended our rules and guidance to reflect this
new date.
Impact of changes on mutual societies
1.10 Section 138K of FSMA requires us to consider if our proposed rules have a significantly different
impact on mutual societies compared with other authorised persons.
1.11 In our consultation paper, we asked for comments or information on any issues for mutual
societies arising from our proposals. We did not receive any feedback on potential issues for
mutual societies, so we consider that our proposals will not have a significantly different impact
on mutual societies compared with other authorised persons.
Equality and diversity considerations
1.12 We are required under the Equality Act 2010 to consider whether our proposals could have
a potentially discriminatory impact on groups with protected characteristics (age, gender,
disability, race or ethnicity, pregnancy and maternity, religion, sexual orientation and gender
reassignment). We are also required to be aware of the need to eliminate discrimination and
support equality of opportunity when carrying out our activities.