Brexit won’t abolish red tape protecting borrowers, says PRA
The Prudential Regulation Authority (PRA), part of the Bank of England, has warned that red tape will not simply fall away after Britain leaves the European Union, according to a July 2017 MortgageSolutions.co.uk article.
The PRA’s objectives are to regulate the lending industry to protect individuals and businesses. These include affordability criteria for landlords applying for commercial mortgages.
In March 2017, the PRA introduced rules that affect staff working for brokers and financial lenders. They are particularly concerned with staff who give advice to their clients or potential borrowers. This also covers anyone providing mortgage advice. If wrong advice is given to clients wanting mortgages or bridging loans, this can cause what the PRA classes as “significant harm”. The PRA can take action against individuals working for brokers and lenders who do not act in the best interest of borrowers when providing advice or arranging loans.
In May 2018, the new European Data Protection Regulation comes into effect, which governs how data is stored, managed, transferred and deleted. This affects the way information is handled by lenders and brokers. The Regulation is designed to protect privacy and consumer rights and is currently in a transitional phase before it becomes mandatory.
The European Data Protection Regulation comes into effect before Britain leaves the EU, and the PRA says that the day that Britain leaves Europe, rules that regulate lenders and brokers will not simply fall away. Bodies like the PRA will continue to protect people taking out mortgages or bridging loans, and companies will still have to conform to high standards of data protection.