MAS Proposes Amendments to Notices on Residential Property Loans
The Monetary Authority of Singapore (MAS) published an information paper that sets out the supervisory expectations and identifies improvement areas based on the thematic inspections conducted on the residential mortgage pricing and disclosure practices of large mortgage lenders over 2020 and early 2021. The paper sets out MAS’ supervisory expectations in the areas of transparency, consideration of customer interests, and accountability and product governance in context of the mortgage lending business. MAS is also proposing changes to the Notices 632A, 1106A, 825A, and 115A, one of the aspects of which is the requirement for financial institutions to provide and explain a Residential Property Loans Fact Sheet (Fact Sheet) to borrowers when marketing property loans. MAS is seeking comments from financial institutions, consumers, and other interested parties until January 14, 2022.
The Fact Sheet covers the relevant information for a borrower’s decision to take up a property loan (including the interest rate of the property loan), the circumstances under which financial institutions may revise the interest rate, and the ways in which loan repayments may change under different interest rate scenarios. MAS is proposing amendments to the aforementioned Notices to enhance financial institutions’ disclosures on interest rate changes as well as alternative arrangements that financial institutions will provide to borrowers should they make unexpected interest rate changes after borrowers have committed to a property loan. This will help borrowers make informed decisions before committing to a property loan. MAS is also proposing amendments to the Notices to facilitate the process for financial institutions to obtain acknowledgements from borrowers on the Fact Sheet digitally or from an authorized joint-borrower on behalf of other borrowers. MAS also proposed administrative amendments to the Fact Sheet to make reference to loan packages pegged to the Singapore Overnight Rate Average or SORA, which financial institutions have started to offer. The Notices with the proposed amendments have been set out in Annex A of the consultation paper.
Comment Due Date: January 14, 2022
Keywords: Asia Pacific, Singapore, Banking, Residential Property Loans, Mortgage Lending, Lending, Interest Rate Risk, Disclosures, Fact Sheet, SORA, MAS
Previous Article
EU Launches Green Team Initiative, Prolongs State Aid FrameworkRelated Articles
APRA Penalizes Heritage Bank for Incorrect Reporting of Capital
The Australian Prudential Regulation Authority (APRA) found that Heritage Bank Limited had incorrectly reported capital because of weaknesses in operational risk and compliance frameworks, although the bank did not breach minimum prudential capital ratios at any point and remains well-capitalized.
OSFI Releases Annual Report 2021-2022
The Office of the Superintendent of Financial Institutions (OSFI) released the annual report for 2020-2021.
APRA Finalizes Guidance on Management of Climate Change Risks
The Australian Prudential Regulation Authority (APRA) released the final Prudential Practice Guide on management of climate change financial risks (CPG 229) for banks, insurers, and superannuation trustees.
EBA Publishes Single Rulebook Q&A Updates in November 2021
The European Banking Authority (EBA) Single Rulebook Question and Answer (Q&A) tool updates for this month include answers to 10 questions.
EC Proposes New Measures Under Capital Markets Union Package
The European Commission (EC) has adopted a package of measures related to the Capital Markets Union.
European Council Adopts Position on Digital Finance Package Proposals
The European Council adopted its position on two proposals that are part of the digital finance package adopted by the European Commission in September 2020, with one of the proposals involving the regulation on markets in crypto-assets (MiCA) and the other involving the Digital Operational Resilience Act (DORA).
PRA Proposes Rulebook Changes; BoE Extends BEEDS Testing Window
The Prudential Regulation Authority (PRA) is proposing, via the consultation paper CP21/21, to apply group provisions in the Operational Resilience Part of the PRA Rulebook (relevant for the Capital Requirements Regulation or CRR firms) to holding companies.
FED Outlines Lending Conditions and Supervisory Activities in H1 2021
The Board of Governors of the Federal Reserve System (FED) published a report that summarizes banking conditions in the United States, along with the supervisory and regulatory activities of FED.
EBA Publishes Standards to Calculate Risk-Weights of CIUs Under CRR
The European Banking Authority (EBA) published the final report on draft regulatory technical standards for the calculation of risk-weighted exposure amounts of collective investment undertakings or CIUs, in line with the Capital Requirements Regulation (CRR).
APRA Expects Boards to Strengthen Ability to Oversee Cyber Resilience
The Australian Prudential Regulation Authority (APRA) recently completed two pilot initiatives in its 2020-2024 Cyber Security Strategy, which was published in November 2020.
