City regulators are under mounting pressure to block the takeover of Co-op Bank by ‘aggressive’ private equity firm Cerberus.
The Financial Conduct Authority (FCA) and the Bank of England’s Prudential Regulation Authority (PRA) must step in to prevent the infamous US firm ‘wrecking more lives’, campaigners have warned.
Both the FCA and the PRA must approve any change in ownership of a UK bank.
A bad sign: The FCA and PRA must step in to prevent the infamous US firm ‘wrecking more lives’
If New York-based Cerberus, which is in takeover talks with the Co-op Bank, is successful in its bid then it will need to seek the green light from both regulators. But so-called mortgage prisoners, held hostage for years by Cerberus, and in some cases threatened with sudden eviction from their homes, are urging the watchdogs to block the deal.
Rachel Neale, who runs the UK Mortgage Prisoners campaign group, said: ‘The regulators cannot allow a sale of the Co-op Bank to this company – it wrecks lives and is a cancer on our financial sector. The Co-op Bank should be running for the hills.’
Cerberus has snapped up billions of pounds of UK loans in cut-price deals since the financial crisis, including some from High Street banks such as Lloyds and NatWest.
These borrowers are now stuck paying sky-high interest rates of up to 10 per cent. Because Cerberus does not have a banking licence, it cannot switch customers onto a better deal – instead it is pursuing Neale and other victims for escalating repayments. –
Cerberus said they were ‘recognised as an excellent corporate citizen, as evidenced by the support and confidence of regulators and the entire stakeholder communities of many leading institutions’.
The Co-op Bank, the FCA and the PRA declined to comment.
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