Cerberus -Do they need a Banking Licence to operate a bank account?

philjc

This may seem like a daft question but it is one that I am being given the run around by the FCA, FOS, BBA.

My question is simple.

I understand fully that an entity without a banking licence is able to purchase terms loans (mortgages) from banks. BUT if the term loan has expired and now sits as an un authorised overdraft in a current account, is a bank able to sell this on to an entity without a banking licence?

Furthermore can this entity then operate the account as an account crediting monies to it that we pay?

I believe that this should fall under FCA regulation but they say not, as do the FOS and the BBA.

Can anyone point me in the correct direction.

Thanks

Wake_up_call

I think you might have to give some more details.

How did a mortgage end up becoming a current account at the end of the term?

My understanding of asset trading is that there can be an owner of record and what is known as a beneficial owner.

In most cases, the owner of record (the one who services the mortgage) holds the permissions from the FCA and its mortgages are regulated like any other. The beneficial owner (in this case Cerberus) do not have to hold any permissions as they are involved in the day to day running of the account. They merely take its profits as a return on their investment.

Thrugelmir

philjc wrote: »

I understand fully that an entity without a banking licence is able to purchase terms loans (mortgages) from banks. BUT if the term loan has expired and now sits as an un authorised overdraft in a current account, is a bank able to sell this on to an entity without a banking licence?

Your lender has sold the debt. The debt is secured by the mortgage on the property. That's what matters.

antrobus

philjc wrote: »

...
My question is simple.

I understand fully that an entity without a banking licence is able to purchase terms loans (mortgages) from banks. BUT if the term loan has expired and now sits as an un authorised overdraft in a current account, is a bank able to sell this on to an entity without a banking licence?

Furthermore can this entity then operate the account as an account crediting monies to it that we pay?

The answers would be 'yes' and 'yes'.

You need a banking licence to accept deposits from the public. You don't need a banking licence to lend money to the public. You might need a consumer credit licence, but I don't think you even need one of those if you stick to mortgages.

P.S. Cerberus purchased a big wodge of NRAM mortgages at the end of last year, I seem to recall.

antrobus

antrobus wrote: »

....P.S. Cerberus purchased a big wodge of NRAM mortgages at the end of last year, I seem to recall.

.... And now I come to think of it, NRAM doesn't have a banking licence either. Never has.

Thrugelmir

antrobus wrote: »

.... And now I come to think of it, NRAM doesn't have a banking licence either. Never has.

When Northern Rock was split.

Good bank was sold to Virgin.

Bad bank was transferred to NRAM and has never underwritten new business.

antrobus

Thrugelmir wrote: »

When Northern Rock was split.

Good bank was sold to Virgin.

Bad bank was transferred to NRAM and has never underwritten new business.

More to the point, the good bank got the customer deposits. The bad bank (NRAM) simply had £50 bn or so of mortgages, and so it never needed a banking licence.

Thrugelmir

antrobus wrote: »

More to the point, the good bank got the customer deposits. The bad bank (NRAM) simply had £50 bn or so of mortgages, and so it never needed a banking licence.

Virgin bought Northern Rock mortgages as well, not just the retail outlets and customer deposits. Cerberus sold on some of the mortgages acquired onto TSB.

antrobus

Thrugelmir wrote: »

Virgin bought Northern Rock mortgages as well, not just the retail outlets and customer deposits. ...

Yes, they did. But they took all the deposits with them, which is why NRAM never needed a banking licence.

Thrugelmir wrote: »

...Cerberus sold on some of the mortgages acquired onto TSB.

I would not be at all surprised.

Wake_up_call

Cerberus did indeed sell off some of its portfolio to TSB, but those accounts are still serviced by UKAR and it is UKAR that holds the FCA permissions as lender of record.

The op claim's about banking licences centres around his mortgage purportedly now being an overdraft on a current account, but he has provided no details on how that has happened.

I could see how with a Barclays reserve mortgage (where secured borrowing could be taken as an overdraft) and I could see how it could be an unsecured loan if he had a Northern Rock together mortgage and had paid off the main mortgage loan, but neither appear to be the case here.

antrobus

Wake_up_call wrote: »

Cerberus did indeed sell off some of its portfolio to TSB, but those accounts are still serviced by UKAR ....

Not for long. UKAR have sold the servicing operation to Computershare.