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FCA urged to put more pressure on Clydesdale review

FCA urged to put more pressure on Clydesdale review
The action group for small business customers of Clydesdale and Yorkshire banks has urged the Financial Conduct Authority to put more pressure on the bank to widen its review into the mis-selling of complex loans.

The FCA has been ordered by Economic Secretary Andrea Leadsom to set up an independent examination of possible "systemic failures" in its redress scheme for mis-sold interest rate hedging products (IHRPs) covered by regulation.

It followed a critical report by the Treasury Committee this week which called on the FCA to set up such a review, and which also called on the Clydesdale and Yorkshire banks to widen its voluntary review of unregulated loans with similar features to IHRPs.

Ms Leadsom said she "strongly supported" the committee's recommendations. Andrew Tyrie, chairman of the Treasury Committee, has welcomed the minister's response.

The committee found that only a fifth of the Tailored Business Loans devised as unregulated products by the Clydesdale had been included in the bank's voluntary review of sales and barely 300 customers were likely to receive any redress. It said the bank's scheme had "lack of public oversight, minimal transparency and limited coverage" and should be revisited if the bank wanted to "build public trust in its actions".

John Glare, chairman of the NAB Customer Support Group, commented: "The reality is that only those customers who are able to challenge the bank, via the courts or the Financial Ombudsman Service, receive any meaningful offers of compensation. The vast majority of affected customers receive nothing. The only solution is urgent intervention by the FCA in the form of a review of Tailored Business Loans which will force NAB to compensate victims fully for their losses, both direct and consequential."

The bank has said its review is "completely in line with FCA guidance" but it will consider "if there is more information that we can publish about our reviews in light of the committee's comments".

Author: Simon Bain Business Correspondent/Personal Finance Editor
Source: Herald Scotland
Last modified onTuesday, 17 March 2015 01:46

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