zlb
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Post by zlb on Dec 6, 2019 18:20:12 GMT
Email today "We have planned for a range of scenarios, one of which involves a designated back-up provider who would step in to keep your loan repayments coming in.
The back-up provider has the flexibility to increase the current loan servicing fee that comes off borrower repayments to cover the cost of servicing your loans."
Is this a change? Is this in response to the devaluation? Why are they announcing it now? Would have thought this would have been in place a long time ago.
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aju
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Post by aju on Dec 6, 2019 18:50:09 GMT
Email today "We have planned for a range of scenarios, one of which involves a designated back-up provider who would step in to keep your loan repayments coming in. The back-up provider has the flexibility to increase the current loan servicing fee that comes off borrower repayments to cover the cost of servicing your loans." Is this a change? Is this in response to the devaluation? Why are they announcing it now? Would have thought this would have been in place a long time ago. I'm not sure this anything to do with the devaluation stuff more FCA rules tightening. I wonder what the rest of the range of scenarios is, hopefully it too is detailed in the updated principles. The relevant full email text is ... It seems like they have to state their company failure provisions now as a result of FCA rules - the thing is whilst they will protect the loans - ringfenced it says - if they go bust or fold for whatever reason then I would think that the wind up costs are more than likely to eat into principle funds as well as interest rates. I'm intrigued on the comment "If we were to wind down it would be returned to you as soon as possible" I'm guessing the loans will still run to completion whoever takes on the company.
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zlb
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Post by zlb on Dec 6, 2019 21:55:50 GMT
Well looking at other platforms failing, I think that what was announced to investors as wind down, often isn't the case. Raising a point where the FCA could have pushed further in that any wind down plan has to be followed to the letter and not negatively impact lenders. Admin aren't allowed to come along and pick apart the plan with lawyers, for example.
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aju
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Post by aju on Dec 6, 2019 23:50:26 GMT
Well looking at other platforms failing, I think that what was announced to investors as wind down, often isn't the case. Raising a point where the FCA could have pushed further in that any wind down plan has to be followed to the letter and not negatively impact lenders. Admin aren't allowed to come along and pick apart the plan with lawyers, for example. I agree but generally speaking its not usually quite like that I feel. I'll need to read the new principles to see if there is any further details but to be honest I don't think I will end up with any great expectations on this front.
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Post by fuzzyiceberg on Dec 7, 2019 7:45:16 GMT
The key thing is whether loans have been properly and exclusively assigned to lenders, and lenders cash ringfenced, so that Zopa creditors have no access to either if Zopa runs into problems. Zopa will say they have done both of these things. Of course even if that is true, the 'back up' provider who will admin the loans in the event of Zopa's demise will take their (large) fees and profit off the top, hence Zopas reference to the back up providers power to increase the 1% service fee.
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