PS15/9: Implementation of the Mortgage Credit Directive and the new regime for second charge mortgages, feedback to CP14/20 and final rules

This Policy Statement sets out our final rules for implementation of the Mortgage Credit Directive and the new regime for second charge mortgages.

Why are we publishing this Policy Statement?

In September 2014 we consulted on our proposed approach to implementing the Mortgage Credit Directive (MCD) and our new regime for second charge mortgages. In this Policy Statement we report on the main issues arising from consultation, highlighting where we have adjusted our policy to take respondents’ views into account, and publish the final rules.

PS15/9: Implementation of the Mortgage Credit Directive and the new regime for second charge mortgages, feedback to CP14/20 and final rules [PDF][1]

Who does this Policy Statement affect?

This Policy Statement will be of interest to lenders, administrators, intermediaries and consumers in both the first and second charge mortgage markets. It will also interest bodies that represent these groups, including firms dealing with niche mortgage products, such as bridging finance or lifetime mortgages.

What are the next steps?

Our final rules largely come into effect on 21 March 2016. All firms involved in regulated activities relating to mortgages or loans that are used to acquire or retain property rights in residential property should consider how our new rules apply to their business. Firms should implement the changes necessary within the appropriate timelines.

If you are currently authorised to conduct regulated activity in relation to first charge mortgages, then you will not need to make any changes to your permissions in order to conduct regulated activity in relation to first and second charge mortgages after 21 March 2016. However we will be contacting authorised first charge firms in late 2015 and early 2016 to understand whether they will carry out second charge activities from 21 March 2016.

If you are currently authorised to conduct regulated activity in relation to second charge mortgages under the interim permission consumer credit regime, and you wish to continue with this activity after 21 March 2016, you will have to apply for the appropriate mortgage permissions. Further details are set out in Chapter 4 of the policy statement.

More about the MCD, including further information about authorisation and consumer-buy-to-let, can be found on our dedicated MCD page.

Find out more:

• CP14/20 Implementing the Mortgage Credit Directive and the new regime for second charge mortgages[2]
• Mortgage Credit Directive