MBE 2015: Barclays learned from MMR with MCD

Speaking at the Mortgage Business Expo 2015, he admitted that with Mortgage Market Review implementation the lender made the mistake of waiting for the final rules before updating its systems rather than working from the draft stage, which meant there was an awkward transitional phase resulting in long turnaround times for some clients.

Fullbrook said: “We’ve… broken down our changes into a number of technology drops so we are not doing a big bang next year.

“We will break it down over a few months so that reduces the risks of technology failure.”

He added: “This time round for the MCD (Mortgage Credit Directive) we mobolised our project from the draft rules stage so that gave us an extra six months to design and find solutions that we wouldn’t have had if we waited for the final rules.

“Also for MMR it’s fair to say that most lenders announced their plans quite late in proceedings which meant that intermediaries had less time to adapt to what lenders were doing. So for MCD we made a conscience effort to engage intermediary clubs and networks earlier to give them the heads up on what we are planning to do, hence I’m talking to you today.”

Ahead of full MCD implementation in March 2016 Fullbrook announced that Barclays will utilise the KFI + document to ease disruption, while it will phase in the use of the ESIS document by 2019.

He also clarified the lender’s position on foreign currency loans. He explained: “Barclays won’t be lending in foreign currency itself but we will accept customers who need to rely on foreign currency income to support their borrowing.

“We will continue to do this through our wealth channel and systems where we have a specialist underwriting team.

“We will be accepting income in the major currencies, we have 70 currencies available, but loans will only be in sterling

“We will issue a warning letter to customers if there is a 20% currency swing, but we will not be offering a conversion to their own currency.”

He added that he doesn’t expect MCD to rock the industry next year; the MMR represented a more substantial change and lenders have benefited from the experience of getting to grips with that regulation.

He said: “MMR was a valuable learning experience for the whole industry and our approach for MCD is to minimise disruption as much as we possibly can.

“I don’t expect lenders to take their foot off the gas next year in order to land MCD. I don’t think it’s as big a deal as MMR by any stretch of the imagination.

“Will it change the market? I don’t think it will at all in my opinion.”