MPs have called on the UK Government to ensure proper redress for small businesses sold complex loans containing interest-rate swaps without their knowledge.
The all-party group which is led by Caithness, Sutherland and Easter Ross MP John Thurso, and includes Dundee East MP Stewart Hosie lodged an early day motion appealing for proper regulation of the so-far unmonitored products, and access to compensation for those afflicted by their inflated repayments and breakage costs.
Campaigners say the products were mis-sold and have resulted in many small firms going to the wall, with “hidden” job losses which could total many thousands across the UK.
Simpler, stand-alone swaps are already subject to a review and compensation process, with the Financial Conduct Authority saying it is unable to quantify the likely final cost of a scheme which is already expected to cost the banks several billion pounds.
Mr Hosie, a member of Westminster’s Treasury Select committee, said he had been angered by what he sees as a failure of regulation over the complex products.
“So far as I can see, these tailored loans have either been mis-designed or mis-sold,” he said. “Why is the FCA not already regulating them, and why have they been excluded from the review?
“The purpose of the early day motion is to force the government’s hand on this, and take their responsibility seriously for the people that have quite clearly been mis-sold these financial products.”
He has already met leaders of the national NAB Support Group, which is primarily contesting products sold by the Clydesdale and Yorkshire banks, and planned to meet local campaigners on Friday.
Their register of members includes dozens of businesses from across the UK, which together report hundreds of job losses, but it is expected that many thousands more firms could have been affected.
Campaign spokesman John Glare said the motion marked a “significant step” in the ongoing battle over mis-selling.
It is the just the latest move in a growing tide of pressure from MPs and MSPs.
Mr Hosie’s Dundee West opposite number Jim McGovern MP has already raised the topic in the Commons, while Business Secretary Vince Cable pledged to take up the issue of embedded swaps earlier this year.
Treasury officials are understood to have discussed the matter with regulators, but no change in policy has so far resulted.
The Financial Ombudsman Service has already provisionally found in favour of St Andrews hotelier Jim McGrory and Pitlochry counterpart Alf Berry, with a final adjudication on their cases expected next year.
Clydesdale has repeatedly stressed that its tailored business loan products are outwith the scope of the ongoing FCA review, but that dissatisfied customers are free to make use of the group’s existing complaints procedure.
The bank has been at pains to insist that it adhered to all regulatory requirements when selling its products. In common with other lenders, it has agreed to review interest-rate hedging products sold since 2001, including certain TBLs, and has promised “fair and reasonable redress” in “appropriate” circumstances.