MPs aim to keep pressure on banks over mis-selling scandal

An early day motion, which is sponsored by the Liberal Democrat MP John Thurso, follows a scandal which involved the mis-selling of financial products to potentially tens of thousands of small businesses.

The motion, which is supported by 24 MPs, including Sheffield South East Labour MP Clive Betts, says that “this House... is concerned that while fixed rate swaps purchased as an independent product are included in the current Financial Conduct Authority (FCA) review scheme, swaps embedded in businesses loans are not.”

The motion also notes that many of these embedded swaps were sold without proper explanation of either the conditions or costs.

It calls on the Government to ensure there is proper regulation in the future and a review and access to redress for those affected in the past.

Mr Betts said he wanted to keep the spotlight on this issue.

“The banks have behaved badly towards their customers, we have got to keep the pressure on them,” he said.

A spokesman for the Financial Conduct Authority said yesterday: “The FCA has agreed a redress scheme with the banks to ensure that those small businesses that were mis-sold interest rate swap derivatives, separate from their loan, get the compensation that they’re owed.

“We are maintaining pressure on the banks so that this is paid out as quickly as possible.

“We’re aware that some firms bought loans which had similar features to interest rate swaps embedded within them, making them an integral part of the loan rather than separate.

“While The FCA has maintained an active interest in this area, as the Early Day Motion makes clear, it does not regulate commercial loans, so these products fall outside of our remit.”