Update – Product transfers for foreign currency borrowers
 
At Clydesdale Bank we have been working hard to ensure we remain compliant with the MCD rule requirements for the deadline of the 21st March 2016. We have also been considering options to continue supporting our existing customer product transfer requests where the existing customer is defined as a foreign currency borrower.

Foreign Currency Lending (FCL)

MCD rules introduce new rights for foreign currency borrowers and additional information on foreign currency loans must be provided including an illustration of the impact of a 20% change in the exchange rate.

This would encompass loans that are in a currency other than that of the customers’ income and also loans in a currency that differs from that where the customer is resident.

For example a UK customer living in Spain but with a sterling mortgage on their UK property would have a loan defined as a foreign currency mortgage.

We previously communicated last year that we do not currently support any new foreign currency lending as defined by the MCD rules via the Broker channel.

This includes non-regulated Buy to Let lending

FCL Product Transfers

From the 21st March 2016 existing customers who only request a product/rate transfer and who are defined as foreign currency borrowers, will now be supported through a contract variation process.

FCL Product Transfer application form

The product transfer application form has been updated to include questions that will help to identify whether an existing customer is defined as a foreign currency borrower.

If the yes checkbox is selected on either FCL question, the case will be identified and managed through a contract variation process.

You and the customer will no longer receive a mortgage offer for their new mortgage deal.

Documentation issued to the customer after the application has been approved and following the processing of the product transfer, will reference that the product transfer is a variation to the customer’s existing mortgage agreement.

Where do I go for further information?

View the MCD updates on www.fca.org.uk or if you have questions specific to Clydesdale Bank please speak to your Relationship Partner.

Updates will be communicated via email and posted to www.clydesdalebankintermediaries.co.uk to keep you fully informed on our progress.