Responsible Lending & Affordability

Responsible Lending and Affordability are non-negotiable principles that underpin the UK's mortgage market reform. The Mortgage Market Review (MMR) now monitors firms in the home finance business.

The FCA promised to deliver a mortgage market that works better for the consumer and is sustainable for all participants. Responsible lending is key to this approach.

Our Responsible Lending and Affordability Course explains the FCA's responsible lending and affordability rules for the home finance business in the UK.

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Responsible Lending & Affordability

About this Course

Available as part of our FCA Compliance Library.

Learning Objectives

This course will prepare your employees to:

  • Recognise the requirement for treating customers fairly and acting in their best interests at all times
  • Understand what is meant by clear, fair and not misleading
  • Understand the value of building relationships of trust by taking due care and ensuring the suitability of advice

Course outline

Welcome

What is Responsible Lending & Affordability?

- Meet the lenders...

Scenario: First-time buyers

- Exercise: Interactive or non-interactive?
- Exercise: Advised or non-advised?
- Exercise: Isabel's priorities
- Assessing needs & circumstances
- Drilling down to get the facts
- The conversation continues...
- Drilling down to clarify expectations
- Tailoring advice
- Exercise: Assessing needs & circumstances
- Exercise: Assessing income
- Lending criteria
- Assessing expenditure
- Clarifying expenditure with the customer
- Exercise: The Greens' expenditure 1
- Exercise: The Greens' expenditure 2
- Exercise: The Greens' expenditure 3
- Exercise: The follow-up meeting

Stress-testing: Affordability for the long term

- Decision time
- Exercise: The Greens get advice

Scenario: Payday loan

- Exercise: Tanya's income
- Tanya's revelation
- Exercise: Tanya's payday loan

Scenario: Handling payment shortfalls

- Exercise: Good practice for the payment shortfalls
- Exercise: Isabel removes Adam's concessionary rate

Scenario: Equity release

- Exercise: Frank's enquiry
- Assessing Frank's needs & circumstances
- Frank's eligibility
- Exercise: Frank's needs & circumstances
- Exercise: Frank's not impressed

Scenario: Contract variations

- Exercise: Lorraine's renewal
- Exercise: Assessing affordability with Lorraine

Scenario: HNW customer

- Exercise: Who is a HNW mortgage customer?
- Exercise: Assessing affordability with Curtis
- Devising a policy for HNW mortgage customers

Scenario: Sale & rent back

- Rajeev advises Irene
- Exercise: Disclosures for SRB agreements
- What Rajeev does next
- Exercise: Does Rajeev follow the rules?
- SRB safeguards
- Exercise: Irene's tenure

Vulnerable customers

Summary

Affirmation

Assessment

FCA Courses Library

Our FCA Course library of over 60 training modules covers everything from high-level and conduct of business standards to thematic topics, including treating customers fairly.

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FCA Courses Library

Course Specifications

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Structure

Approximately 60-minute long e-learning course followed by a 14-question assessment.

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Audience

Suitable for all staff - examples and interactivities designed for staff at all levels. No previous knowledge or experience is required.

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Design

SHARD-compliant, responsive display on all devices, accessibility on screen readers, visual design controlled via a client style sheet.

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Test-Out

Ability to offer optional test-out, whereby users can choose to skip the course content and complete the learning assignment simply bypassing the assessment.

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Compatibility

All Windows, Mac OSX, iOS, Android (Flash-free for mobile compatibility). AICC and SCORM 1.2-compliant, suitable for both hosted and deployed SCORM or AICC.

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Tailoring

Fully customisable on Skillcast Portal CMS.

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Translation

Pre-translated versions not available, but all text content can be exported for translation into all languages.

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Localisation

Based on UK legislation, but suitable for global audiences upon the removal of UK-specific references and translation as necessary.