City watchdog has intervened against 32 lenders over treatment of customers

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The chief of the financial regulator said it has initiated proceedings against 32 institutions over their treatment of borrowers affected by the crisis of livelihood.

Nikhil Rathi, chief executive of the Financial Conduct Authority (FCA), said the reputation of banks is “at stake” if they do not properly deal with issues related to the financial crisis in the coming months.

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It came as Mr Rathi and FCA chairman Ashley Elder faced significant scrutiny from members of the Treasury committee over the regulator’s recent actions.

Mr Rathi was broadly positive about the recent behavior of finance firms in relation to customers, and stressed that they have acted where necessary to protect individuals.

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“Broadly speaking, for the largest institutions we are seeing them doing the right thing,” he told lawmakers.

I believe the leadership of the banks realize that their reputation is at stake if they do not deal with things appropriately in the next few months

“The number repossessions stand at 1,054 in the most recent quarter where we have data, which is well below where we were before the pandemic.

“There are 32 institutions where we have felt that they have not treated borrowers in financial difficulty properly and we have intervened with those institutions on their conduct.

“We are very conscious of the issues we are looking into, and I believe the leadership of the banks realize that their reputation is at stake if they do not deal with things appropriately over the next few months. “

FCA bosses said the regulator has stepped up action in relation to financial promotions, intervening “nearly 8,000 times” to crack down on adverts that fail to meet required standards.

It came during a session in which the regulator faced questions on how it looks after its own workforce.

The FCA, which regulates the operations of some 50,000 financial services businesses, has been at loggerheads with its workers over pay and conditions and has been the target of unions.

Labor MP Emma Hardie told the leadership of the FCA that she has spoken to members of staff who are keen to leave the regulator because of their treatment.

“What I hear is that they feel incredibly frustrated, feel like they are disrespected, not taken care of very well and want to leave,” she said.

In response, Mr Elder said: “I know that FCA has been through a difficult period in terms of staffing.

“I was very surprised when talking to people in the beginning that I found a greater level of confidence in the mission than I thought I would find from what I heard.

“Taking it further, the way we engage with employees is important and the number of employees recruited last year was huge, around 1,200. From the board’s point of view, there is the challenge of training and integration.”

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