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Peer2Peer Finance News | September 19, 2019

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Lord Myners heaps further pressure on FCA over Lendy failings

Lord Myners heaps further pressure on FCA over Lendy failings
Marc Shoffman

FORMER City minister Lord Myners is keeping the pressure on the Financial Conduct Authority over its decision to authorise now-collapsed peer-to-peer lending platform Lendy.

A series of written parliamentary questions show Lord Myners is seeking answers on whether better regulation is needed and the creditor status of Lendy investors.

His latest questions ask the government if it has identified any features in common in the cases of the collapse of London Capital and Finance, Lendy and Collateral that require a change in regulation, law or process.

Another asks whether the FCA was informed, or aware that investors via Lendy were creditors to a P2P platform; and whether such information could have been determined from the accounts of Lendy.

There has not been a response yet but the Treasury has rejected a question from Lord Myners that called for information on what discussions the government has had with the FCA about the case an investigation into its decision to authorise Lendy.

“Treasury ministers and officials have regular meetings with a wide variety of organisations in the public and private sectors, including the FCA,” Lord Young responded on behalf of the government.

“The operationally independent FCA’s investigation into the circumstances that led to the administration of Lendy is ongoing, and it would be inappropriate for government to pre-empt its findings.”

The latest administrator’s report on Lendy showed that the FCA had given full authorisation to the platform at the same time that it had raised concerns about its loans, but it has now emerged that there was also a compensation scheme in place.

A report in The Times claims the regulator ordered Lendy to set up a £1.9m compensation scheme for mis-sold loans in late 2017, before providing it with full authorisation in July 2018.