City watchdog has intervened against 32 lenders over treatment of customers
The boss of the financial regulator said it has intervened against 32 institutions over their treatment of borrowers impacted by the cost-of-living crisis.
Nikhil Rathi, chief executive of the Financial Conduct Authority (FCA), said the reputations of banks “are at stake” if they do not deal properly with issues related to financial distress in the coming months.
It came as Mr Rathi and FCA chairman Ashley Alder faced significant scrutiny from members of the Treasury Committee over the recent actions of the regulator.
Mr Rathi was broadly positive about recent behaviour by finance firms with regards to customers, and stressed they have acted to protect individuals where needed.
“Broadly speaking, for the largest institutions we are seeing them act appropriately,” he told MPs.
“The number repossessions is at 1,054 in the most recent quarter where we have data, which is significantly below where we were before the pandemic.
“There have been 32 institutions where we have felt they have not treated borrowers in financial difficulty properly and we have intervened with those institutions over their conduct.
“We are very alive to those issues and we are watching, and I believe that leadership of banks realise their reputations are at stake if they don’t deal with things appropriately in the next few months.”
The FCA bosses added that the regulator has stepped up actions in relation to financial promotions, intervening “around 8,000 times” to bring down adverts which failed to meet necessary standards.
It came during a session which also saw the regulator face questions over how it looks after its own workforce.
🗣️ Our accountability session with the Chair and Chief Executive of @TheFCA has now started.
📺 Watch the session live 👇https://t.co/s8ViHDkCmv
— Treasury Committee (@CommonsTreasury) March 8, 2023
The FCA, which regulates the conduct of around 50,000 financial services businesses, has been in dispute with its workers over pay and conditions and has come under fire from unions.
Labour MP Emma Hardy told the FCA’s leadership that she has spoken to staff members keen to leave the regulator due to their treatment.
“What I’ve heard is that they feel incredibly demoralised, feel like they are disrespected, not looked after very well and want to leave,” she said.
In response, Mr Alder said: “I know that the FCA has been through a difficult period in terms of staffing.
“I was quite surprised when speaking to people initially that I got a greater level of confidence around mission than I thought I would get given what I’d heard.
“Taking this forward, the way we engage with staff is important and last year, the sheer number of staff recruited was large, around 1,200. From a board perspective, there is a training and integration challenge there.”