United Kingdom

Topic: Consumer credit

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FCA portfolio letter to firms in the mainstream consumer credit lenders portfolio

On 2 December 2020, the FCA published a letter it had sent to the board of directors of firms assigned to the mainstream consumer credit lenders portfolio. In the letter the FCA: Sets out its view of the risks mainstream consumer credit lenders may pose to their consumers or the markets in which they operate. … Continue Reading

FCA confirms support for consumer credit customers impacted by COVID-19

On 19 November 2020, the FCA confirmed updated guidance to firms setting out enhanced support that should be available to consumer credit customers experiencing payment difficulties as a result of the COVID-19 pandemic. The guidance covers users of personal loans, credit cards, store cards, catalogue credit, rent to own, buy now pay later, pawn broking, … Continue Reading

The Consumer Credit (Enforcement, Default and Termination Notices) (Coronavirus) (Amendment) Regulations 2020

On 11 November 2020, there was published on legislation.gov.uk The Consumer Credit (Enforcement, Default and Termination Notices) (Coronavirus) (Amendment) Regulations 2020 together with an explanatory memorandum.  The Consumer Credit Act 1974 (the Act) created a consumer protection regime, which required creditors or owners to send notices to borrowers or hirers under regulated agreements before taking … Continue Reading

FCA call for input: review into change and innovation in the unsecured credit market

On 2 November 2020, the FCA issued a call for input seeking views into how the unsecured credit market is changing, particularly in light of the COVID-19 pandemic, and how regulation can support this market. The call for input is focussed on the following four key themes: Drivers and use of credit. The FCA has … Continue Reading

FCA regulation of consumer credit – during the pandemic and beyond

On 13 October 2020, the FCA published a speech by Nisha Arora (Director of Consumer and Retail Policy) entitled FCA regulation of consumer credit – during the pandemic and beyond. Key points in the speech include: In all the FCA’s work to protect consumers in credit and other markets, it is guided by the Principles … Continue Reading

FCA confirms next stage of support for consumer credit and overdraft customers

In April 2020 the FCA published temporary guidance setting out how it expects firms to support consumer credit and overdraft customers who were facing temporary payment difficulties because of the exceptional circumstances arising out of coronavirus. This guidance was updated in July (the July Guidance). On 31 July 2020, the FCA published a Call for … Continue Reading

Christopher Woolard to chair review of unsecured credit market regulation

On 16 September 2020, the FCA announced that Chris Woolard will chair a review of the future regulation of the unsecured credit market. The review will concentrate on how regulation can better support a healthy unsecured lending market. It will take into account the impact of the coronavirus pandemic on employment security and credit scores, … Continue Reading

FCA highlights concerns when credit firms allow repeat borrowing

On 6 August 2020, the FCA published the findings of its review into relending by firms that offer high-cost credit. The review, which was completed prior to the coronavirus pandemic, highlights concerns about poor practices by some firms and notes that nearly half of consumers regretted borrowing more money. As firms in this sector begin … Continue Reading

FCA Call for input – Ongoing support for consumers affected by coronavirus: mortgages and consumer credit

The COVID-19 pandemic is continuing to present challenges across the board with regional lockdowns, closures of “air-bridges” and talks of a second wave dominating media outlets at the present time. If the pandemic has brought certainty in one regard, it is that the future is more uncertain than ever. In order to help provide further … Continue Reading

FCA to ban motor finance discretionary commission models

On 28 July 2020, the FCA announced that following its earlier consultation in October 2019 it will introduce a ban on motor finance discretionary commission models. In the light of consultation feedback and the additional operational pressures which the motor finance sector is facing at present the FCA has agreed to give firms limited additional … Continue Reading

FCA proposals to update temporary guidance for firms

On 24 April 2020, the FCA published temporary guidance concerning: Motor finance agreements and coronavirus. High-cost short-term credit (HCSTC) and coronavirus: temporary guidance for firms. Rent-to-own, buy-now pay-later and pawnbroking agreements and coronavirus. On 3 July 2020, the FCA announced proposals to amend the above temporary guidance so to provide continued support for users of … Continue Reading

Roadmap – Consumer credit agreements and review of EU rules

On 23 June 2020, the European Commission published a roadmap concerning a review of the Consumer Credit Directive (CCD). Following a REFIT Platform opinion recommending an assessment of the relevance, effectiveness and efficiency of the standard information to be included in advertising concerning credit agreements, the Commission evaluated the CCD in 2018-2019. The full results … Continue Reading

Joint RTS on amendments to the bilateral margin requirements under EMIR in response to the COVID-19 outbreak

On 4 May 2020, the European Supervisory Authorities (ESAs) published joint draft Regulatory Technical Standards (RTS) to amend the Delegated Regulation on the risk mitigation techniques for non-centrally cleared over-the-counter derivatives (bilateral margining), under the European Markets Infrastructure Regulation, to incorporate a one-year deferral of the two implementation phases of the bilateral margining requirements. On … Continue Reading

Adapting to change is business as usual: keeping you connected throughout the pandemic Financial relief for consumer borrowers

Over the coming weeks, partners from our financial services team will be sharing with clients and contacts a series of video diaries setting out their views on the latest developments in respect of COVID 19 impacts in the various areas of financial services. In our fourth video diary, Matthew Gregory discusses today’s FCA proposals (made … Continue Reading

Adapting to change is business as usual: keeping you connected throughout the pandemic TCF considerations for mortgage lenders and administrators

Over the coming weeks, partners from our financial services team will be sharing with clients and contacts a series of video diaries setting out their views on the latest developments in respect of COVID 19 impacts in the various areas of financial services. In our third video diary, Iain Hawthorn discusses the recent government announcements … Continue Reading

FCA letter – key risks credit brokers should consider and act on

On 13 February 2020, the FCA published a letter setting out its views on the key risks credit brokers could pose to their consumers or markets. Credit brokers are asked to consider the extent of these risks in their business and assess if their strategies reduce the risks. The FCA explains that it has examined … Continue Reading

FCA consults on motor finance discretionary commission models and consumer credit commission disclosure

On 15 October 2019, the FCA published Consultation Paper 19/28: Motor finance discretionary commission models and consumer credit commission disclosure (CP19/28). In CP19/28 the FCA is proposing a ban on commission models where the amount received by the broker (including motor dealers) is linked to the interest rate that the customer pays and which the … Continue Reading

New consumer credit video: The FCA’s motor finance review – lessons for the wider consumer credit market

In our latest consumer credit video, Matthew Gregory, John Coley and Simon Lovegrove take a look at the FCA’s motor finance review and consider what it means for the consumer credit industry generally. Among other things the motor finance review discussed training, which is a key part of the Senior Managers and Certification regime. We … Continue Reading

FCA launches review of the Credit Information Market

On 27 June 2019, the FCA launched a market study to examine how the credit information market operates and the impact it has on consumers. The FCA will report on its preliminary conclusions on these themes in Spring 2020 including, if appropriate, a discussion of potential remedies. The FCA is not formally consulting on the … Continue Reading

Advocate General opinion on the interpretation of Article 16(1) of the Consumer Credit Directive

On 23 May 2019, there was published on InfoCuria (Case-law of the Court of Justice) the opinion of Advocate General Hogan as regards the interpretation of Article 16(1) of the Consumer Credit Directive which concerns the entitlement of a consumer to a reduction in the cost of credit where he or she has fully or … Continue Reading

FCA final report on review of retained provisions of the CCA

On 25 March 2019, the FCA published its final report (the Report) on its review of retained provisions of the Consumer Credit Act 1974 (CCA). The FCA took over responsibility for regulating consumer credit in April 2014. As part of the transfer, Parliament repealed some CCA provisions and some were replaced by FCA rules. The … Continue Reading
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