Azure Global : 05/17/13

Friday 17 May 2013

FCA to collect mortgage borrowers' personal data

Regulator's proposals could spark privacy row and may have data protection and human rights implications

The personal financial information of millions of people – including how much they earn and whether they have fallen behind on any payments – is to be "collected and processed" by the UK's main financial watchdog as part of its attempts to police the mortgage market.

However, the Financial Conduct Authority (FCA) could spark a row over privacy after acknowledging that its proposals may have data protection and human rights implications.

The regulator is promising that people's personal data will be "fairly and lawfully processed," and said the plans mean it will be able to share information with the police about suspected mortgage fraud. However, it will also be sharing the data with the Bank of England and its Prudential Regulation Authority.

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If the FCA's proposals are approved, it will begin harvesting vast amounts of data relating to both new and existing mortgages.

For new home loans this will include:

• details of each borrower's income, such as bonuses and overtime pay

• information on household spending and other commitments such as maintenance and child support

• total outstanding credit commitments such as loans and credit cards

• whether the borrowers have any financial black marks against them, such as loan arrears or county court judgments

• the number of dependent children they have

• the age at which they are planning to retire

The "performance data" gathered on existing mortgages would be less detailed but include the property's postcode and an estimate of what it is worth, plus information on the current outstanding balance and any arrears.

It has been clear for some time that those who apply for a mortgage can expect lots more personal questions as a result of the FCA's ongoing shakeup of the home loans market, designed to prevent a return to risky lending.

Millions of people could be affected by FCA proposals to 'collect and process' personal financial information.

As part of its long-running "mortgage market review", originally announced in 2009, new rules covering the sector will take effect in April 2014. However, the FCA's desire to collect much more detailed information about individual borrowers will have come as a surprise to many.

The FCA said the plans reflected its objectives to protect consumers by: helping it identify risks and prevent harm; enabling it to make "quicker and bolder" decisions to keep the market running efficiently; promoting effective competition.

However, the regulator acknowledged that the proposals will mean it will have responsibilities under data protection and human rights acts:

"Any personal data we collect will be fairly and lawfully processed in compliance with the first data protection principle ... We consider that in collecting the data we will be acting compatibly with the right to privacy. The collection of the data is necessary to achieve the aims set out in this consultation paper, and any interference with the right is proportionate to those aims."

The information will be used by the FCA's "policy, risk and research division", in its role as the regulator's "radar," to identify and analyse trends in the market "and provide a more intelligent view of the issues we, consumers and industry face".

The plan is that banks, building societies, credit unions and other mortgage firms would need to begin collecting the new data from the start of 2015. The changes will mean extra costs for the 250 companies that submit mortgage product sales data.

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Article source : http://www.guardian.co.uk \

Unions condemn RBS job cuts

Royal Bank of Scotland cuts 1,400 jobs in its high street banking arm

Royal Bank of Scotland is axing 1,400 jobs in its high street banking arm in a move that unions described as "brutal and irresponsible".

Less than 48 hours after the bailed-out bank's chairman Sir Philip Hampton had indicated job cuts were on the cards, the 81% taxpayer-owned bank said it was restructuring its retail head offices in the UK, largely in London and Edinburgh. The 1,400 jobs will go in the next two years.

The swingeing cuts – the support functions being targeted employ 3,600 staff – are being masterminded by Ross McEwan, the new boss of the retail division.

Some 37,500 roles have already been lost at RBS under the group chief executive, Stephen Hester, who was appointed after the £45bn taxpayer bailout in 2008, and Unite, Britain's biggest union, said 700 of the latest cutbacks had been outlined to affected staff.

"This is brutal and irresponsible behaviour from RBS which is almost entirely owned by the taxpayer," said Unite national officer Dominic Hook.

RBS is cutting 1,400 jobs

"It is high time that the banks took their social responsibilities seriously. Since the start of the year RBS, HSBC, Barclays and Lloyds have announced plans to slash about 6,900 jobs. The industry almost caused the economy to implode in 2008 and now it is contributing to a jobs crisis."

HSBC warned on Wednesday that another 14,000 jobs would be lost in its operations around the world while Lloyds will have cut 40,000 since its £20bn bailout by the time its latest restructuring is completed at the end of this year.

McEwan said RBS, which last June was paralysed by a computer meltdown which stopped customers accessing their accounts, was investing £700m in improving services.

"Regrettably, we can only do that by restructuring the way we work in head office so that every effort is concentrated on supporting our customers and the frontline staff that serve them. This is clearly difficult news for our staff and we will do everything we can to support them, including seeking redeployment opportunities wherever possible to ensure compulsory redundancies are a last resort."

The union said the biggest impact would be on staff in the Gogarburn head office on the outskirts of Edinburgh with the rest of the cuts spread across the country. Two departments providing support to frontline staff are being cut by 80%, the union said.

Article source : http://www.guardian.co.uk

City veteran Sir John Bond voted off board of Glencore Xstrata

Shareholder revolt forces Bond to hand chairmanship of annual meeting to former BP boss Tony Hayward

One of the most dramatic shareholder revolts in recent years was staged on Thursday when City veteran Sir John Bond was ousted from the board of Glencore Xstrata and replaced as chairman by Tony Hayward, the former BP boss whose reputation hit rock bottom during the Gulf of Mexico oil spill.

The humiliation of Bond marked an extraordinary comeback for Hayward, who was forced out of BP in July 2010 after mishandling the Deepwater Horizon spill and had looked destined for a long period in the corporate wilderness.

But in a dramatic scene at the start of the first annual meeting of the newly formed FTSE 100 commodity trading and mining house, Hayward was promoted from senior independent director to interim chairman and Bond was left scrambling to repair the damage to his reputation caused by the negotiations to sell Xstrata to Glencore.

The once-disgraced BP boss is now temporarily chairing a FTSE 100 boardroom that has been stripped of four other non-executive directors – all formerly of Xstrata – who were also ousted on Thursday. Investors had been angered at the way Xstrata had been sold with huge additional pay awards – initially of as much as £240m – designed to retain the services of 73 of the mining group's managers.

At BP, Hayward infuriated Americans when he said "I want my life back" in the aftermath of the explosion and oil spill that killed 11 people. It also caused pollution across the Gulf of Mexico and left the company with a compensation bill of at least $40bn.

Hayward had begun his rehabilitation at cash shell Vallares, now spun into the Kurdish oil company Genel, which he runs. He took on the non-executive position at Glencore after it floated two years ago and began its courtship of Xstrata.

Sir John Bond was chairman of HSBC and Vodafone before joining Xstrata.

Bond had been chairman of Xstrata and was to chair the enlarged company until a successor was found, but he stunned the first annual meeting of the new company by revealing he had failed to be elected by big institutional investors, which voted by proxy ahead of the meeting.

In scenes rarely witnessed at any company, Bond handed control of the session to Hayward as the meeting began, saying it was the "right thing for me to do". The scale of opposition later became clear: 80% of investors voted against him, a scale of rebellion that shareholder advisory group Manifest described as unprecedented.

The 71-year-old former HSBC banker later issued a statement in which he acknowledged that the retention payments for Xstrata managers had caused the revolt. "I recognise and respect the strong opposition among many to the retention arrangements which the board felt appropriate to ensure management stability," said Bond.

Three former Xstrata boardroom colleagues – Con Fauconnier, a former mining executive; Peter Hooley, the former finance director of Smith & Nephew; and Ian Strachan, the one-time boss of engineer BTR – were all also voted down. The other non-executive from Xstrata who had been due to sit on the board, former Treasury mandarin Sir Steve Robson, refused to allow his name to go forward for the vote.

Bond, one of the most senior figures in the City, admitted the takeover had been "complex and protracted, hence the anomalous situation today of my being up for re-election when I had anticipated departing with my successor in place".

He had taken on a number of high profile roles after retiring from HSBC in 2006, including chairing Vodafone until 2011. He then joined Xstrata, where his tenure was dominated by the controversial tie-up with Glencore. The deal was subject to a number of renegotiations beforefinally being approved in November.

His announcement that he would be not be elected came just hours after an early-morning notice to the stock exchange that Robson had resigned without standing for re-election to the new board. Robson was also on the board of Royal Bank of Scotland when it nearly collapsed.

Just four directors are left on the Glencore Xstrata board, a fact that immediately sparked anxiety that Ivan Glasenberg, the founder of Glencore, would wield too much control. One investor said: "It's a real mess, and unhelpful for building investor confidence."

Glasenberg had agreed to vote his 8% stake on the company in favour of all the members of the board.

Sarah Wilson, chief executive of Manifest, said the board might find it difficult to attract non-executive directors. And Anne Fraser, head of corporate governance at fund manager SWIP, one of the group's largest 10 shareholders, said: "What matters now is to secure the appointment of an independent chairman who commands the support of both external and internal shareholders."

Article source : http://www.guardian.co.uk

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