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
EBA Proposes Standards for IRRBB Reporting Under Basel Framework
The European Banking Authority (EBA) proposed implementing technical standards on the interest rate risk in the banking book (IRRBB) reporting requirements, with the comment period ending on May 02, 2023.
FED Issues Further Details on Pilot Climate Scenario Analysis Exercise
The U.S. Federal Reserve Board (FED) set out details of the pilot climate scenario analysis exercise to be conducted among the six largest U.S. bank holding companies.
US Agencies Issue Several Regulatory and Reporting Updates
The Board of Governors of the Federal Reserve System (FED) adopted the final rule on Adjustable Interest Rate (LIBOR) Act.
ECB Issues Multiple Reports and Regulatory Updates for Banks
The European Central Bank (ECB) published an updated list of supervised entities, a report on the supervision of less significant institutions (LSIs), a statement on macro-prudential policy.
HKMA Keeps List of D-SIBs Unchanged, Makes Other Announcements
The Hong Kong Monetary Authority (HKMA) published a circular on the prudential treatment of crypto-asset exposures, an update on the status of transition to new interest rate benchmarks.
EU Issues FAQs on Taxonomy Regulation, Rules Under CRD, FICOD and SFDR
The European Commission (EC) adopted the standards addressing supervisory reporting of risk concentrations and intra-group transactions, benchmarking of internal approaches, and authorization of credit institutions.
CBIRC Revises Measures on Corporate Governance Supervision
The China Banking and Insurance Regulatory Commission (CBIRC) issued rules to manage the risk of off-balance sheet business of commercial banks and rules on corporate governance of financial institutions.
HKMA Publications Address Sustainability Issues in Financial Sector
The Hong Kong Monetary Authority (HKMA) made announcements to address sustainability issues in the financial sector.
EBA Updates Address Basel and NPL Requirements for Banks
The European Banking Authority (EBA) published regulatory standards on identification of a group of connected clients (GCC) as well as updated the lists of identified financial conglomerates.
ESMA Publishes 2022 ESEF XBRL Taxonomy and Conformance Suite
The General Board of the European Systemic Risk Board (ESRB), at its December meeting, issued an updated risk assessment via the quarterly risk dashboard and held discussions on key policy priorities to address the systemic risks in the European Union.