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You can find the current article at its original source at http://www.guardian.co.uk/money/2013/mar/29/fsa-inaction-morgtage-rate-hikes-row
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| FSA inaction over mortgage rate hikes sparks row with MPs | FSA inaction over mortgage rate hikes sparks row with MPs |
| (5 days later) | |
| MPs are demanding answers from the City regulator about whether borrowers have been treated unfairly, as a row rages over a decision to dramatically increase monthly payments for thousands of Bank of Ireland and Bristol & West mortgage customers. | MPs are demanding answers from the City regulator about whether borrowers have been treated unfairly, as a row rages over a decision to dramatically increase monthly payments for thousands of Bank of Ireland and Bristol & West mortgage customers. |
| The Financial Services Authority (FSA) revealed it was not planning to take any action, as the matter fell outside its remit – prompting criticism from the chairman of the Commons Treasury select committee. | The Financial Services Authority (FSA) revealed it was not planning to take any action, as the matter fell outside its remit – prompting criticism from the chairman of the Commons Treasury select committee. |
| In February 2013 it emerged that around 13,500 Bank of Ireland UK customers – including people who originally signed up with its Bristol & West division – will see their monthly mortgage costs soar as a result of changes being made to some of its base-rate tracker deals. | In February 2013 it emerged that around 13,500 Bank of Ireland UK customers – including people who originally signed up with its Bristol & West division – will see their monthly mortgage costs soar as a result of changes being made to some of its base-rate tracker deals. |
| Some borrowers' bills will double or triple after the lender said it was invoking a little-known clause in loan agreements. Almost half of those affected hold standard residential home loans, while the rest are buy-to-let landlords. | Some borrowers' bills will double or triple after the lender said it was invoking a little-known clause in loan agreements. Almost half of those affected hold standard residential home loans, while the rest are buy-to-let landlords. |
| One customer, Gary Smith, said his monthly mortgage payment would be shooting up from £243 to around £780 after Bank of Ireland said it was increasing the interest rate "differential" (the extra percentage on top of the base rate) on a proportion of its UK tracker mortgages. | One customer, Gary Smith, said his monthly mortgage payment would be shooting up from £243 to around £780 after Bank of Ireland said it was increasing the interest rate "differential" (the extra percentage on top of the base rate) on a proportion of its UK tracker mortgages. |
| The rate hike will be applied in two stages for residential customers. From 1 May, the new differential will be 2.49%, rising to 3.99% on 1 October. Buy-to-let borrowers will suffer the increase all in one go. They typically pay around 2.25% (base rate plus a 1.75% differential) but will see this jump to 4.99% on 1 May. The bank said it was triggering a "special condition" clause that allowed it to increase the differential. | The rate hike will be applied in two stages for residential customers. From 1 May, the new differential will be 2.49%, rising to 3.99% on 1 October. Buy-to-let borrowers will suffer the increase all in one go. They typically pay around 2.25% (base rate plus a 1.75% differential) but will see this jump to 4.99% on 1 May. The bank said it was triggering a "special condition" clause that allowed it to increase the differential. |
| Andrew Tyrie, the Treasury select committee chairman, wrote to the FSA earlier this month and posed a number of questions about whether or not the agreements contained unfair clauses, whether this amounted to mis-selling, and how many other lenders had such clauses in their small print. | Andrew Tyrie, the Treasury select committee chairman, wrote to the FSA earlier this month and posed a number of questions about whether or not the agreements contained unfair clauses, whether this amounted to mis-selling, and how many other lenders had such clauses in their small print. |
| The FSA's managing director, Martin Wheatley, wrote back to say that the regulator's rules did not apply in this case because the mortgages affected by the decision were taken out before the FSA started policing home loans in 2004. In addition, some are buy-to-let mortgages, which are not regulated by the FSA. He added: "We do not plan to take further action … However, we will continue to ensure Bank of Ireland UK treats those customers who have been impacted by the change, fairly." | The FSA's managing director, Martin Wheatley, wrote back to say that the regulator's rules did not apply in this case because the mortgages affected by the decision were taken out before the FSA started policing home loans in 2004. In addition, some are buy-to-let mortgages, which are not regulated by the FSA. He added: "We do not plan to take further action … However, we will continue to ensure Bank of Ireland UK treats those customers who have been impacted by the change, fairly." |
| Tyrie has now written back, saying this response "does not address the main issues" and poses more questions. The MP said: "We need more information to be confident that the regulator has thought carefully about this issue. It must exercise judgment to ensure that customers are being treated fairly. Mr Wheatley's letter appears to fall short on both counts." | Tyrie has now written back, saying this response "does not address the main issues" and poses more questions. The MP said: "We need more information to be confident that the regulator has thought carefully about this issue. It must exercise judgment to ensure that customers are being treated fairly. Mr Wheatley's letter appears to fall short on both counts." |
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