The Financial Conduct Authority has revealed concern about the Bank of Ireland’s mortgage rate hike and is working with the lender to help consumers.
In a letter to Treasury select committee chair Andrew Tyrie, dated 20 May but only published this week, FCA chief executive Martin Wheatley says its powers are restricted because all mortgages were sold prior to regulation of the sector.
On 1 May, the bank increased its tracker mortgage rate for 13,500 borrowers. The rate rose from Bank of England base rate plus 1.75 per cent to base rate plus 4.49 per cent for buy-to-let deals and base plus 2.49 per cent for residential.
Wheatley said: “I would like to assure you that the FSA was concerned about this issue from a consumer protection perspective and that the FCA continues to work with the firm to ensure appropriate consumer outcomes.”
The letter was written the day before the BoI reversed its decision for 1,200 customers.
The FCA is currently considering a plea by hundreds of borrowers to assist them in a class action against the lender.
Property118.com founder Mark Alexander, who is part of the class action, says: “The FCA has to put more pressure on the BoI and investigate further. We are very confident the BoI will have no choice but to back down on the whole 13,500 affected borrowers. It is just a matter of time.”