United Kingdom

Topic: Consumer credit

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Treasury Committee inquiry into consumers’ access to financial services

On 9 November 2018, the Treasury Committee (the Committee) announced the launch of a new inquiry (the Inquiry) into consumers’ access to financial services. The Committee will scrutinize whether certain groups of consumers are excluded from obtaining a basic level of service from financial services providers. It will also examine whether vulnerable consumers pay more … Continue Reading

HM Treasury consults on breathing space and statutory debt repayment plan proposals

On 30 October 2018, HM Treasury published a consultation (the Consultation) on the policy proposal for the implementation of a breathing space and statutory debt repayment plan, both announced in the 2017 Conservative party manifesto. The two proposals should be viewed separately. The first proposal, breathing space, would give an individual in problem debt the … Continue Reading

FCA Dear CEO letter – HCSTC loans

On 15 October 2018, the FCA published a Dear CEO letter regarding an increase in complaints about unaffordable lending and setting out how the regulator expects high-cost short-term credit (HCSTC) firms to manage the impact. The Dear CEO letter begins by stating that firms should take prompt action to: assess their lending activity to determine … Continue Reading

FCA sets out expectations for debt packager firms

Introduction On 5 October 2018, the FCA published a Dear CEO letter to debt packager firms. The service that these firms provide include: gathering customer information; providing debt counselling advice on the debt solutions available; recommending a debt solution for the customer; and, referring on to a third party provider. Upon this referral, the firm … Continue Reading

FCA thematic review on impact of credit broking remuneration models at point of sale

On 27 September 2018, the FCA published Thematic Review 18/2: Impact of credit broking remuneration models at the point of sale (TR18/2). The FCA review considered whether inter-firm commission affects how consumers are sold credit and whether commission arrangements are resulting in consumer harm. The FCA’s research as part of the review did not find … Continue Reading

Creditworthiness Assessment Bill 2017-19: first reading

On 12 September 2018, there was presented in the House of Commons the Creditworthiness Assessment Bill 2017-19 (the Bill), where it received its first reading. The Bill, a private members bill, if enacted, will amended the Financial Services and Markets Act 2000 to require the FCA to ensure that firms carrying on credit-related regulated activities … Continue Reading

Policy Statement 18/19: Assessing creditworthiness in consumer credit

Introduction On 30 July 2018, the FCA published Policy Statement 18/19: Assessing creditworthiness in consumer credit – Feedback on CP17/27 and final rules and guidance (PS18/19). In PS18/19 the FCA summarises and responds to feedback to Consultation Paper 17/27: Assessing creditworthiness in consumer credit (CP17/27). It also publishes final rules and guidance in its Consumer … Continue Reading

Four former directors of online consumer credit broker banned by FCA for misleading customers

On 25 July 2018, the FCA published final notices that it has issued to four former directors and shareholders of Secure My Money Limited (now dissolved), prohibiting them from performing any function relating to any regulated activity: Mark Kennedy. David Mullins. Edward Booth. Christopher Brotherton. The final notices state that that between November 2013 and … Continue Reading

FCA publishes outcomes of pawnbroking sector review

On 10 July 2018, the FCA published the outcomes of its pawnbroking sector review. The review itself highlighted a number of positive aspects of the sector as well as risks. Positive features included: business models focused heavily on customers with quality of service and relationships being paramount; product terms were flexible and personalised in the … Continue Reading

Commission issues an evaluation roadmap on the Consumer Credit Directive

The European Commission has published an evaluation roadmap of the Consumer Credit Directive (CCD).  The evaluation of the CCD is expected to conclude in 2019. The evaluation will gather evidence regarding the functioning of the CCD in its totality and in particular, regarding the following aspects: design and distribution phases of credit products; cross-selling of … Continue Reading

FCA publishes outcome of high-cost credit review

On 31 May 2018, the FCA announced proposals designed to protect consumers who use overdrafts and high-cost credit. The proposals are contained in: Consultation Paper 18/12: High-cost Credit Review: Consultation on rent-to-own, home-collected credit, catalogue credit and store cards, and alternatives to high-cost credit, discussion on rent-to-own pricing (CP18/12); and Consultation Paper 18/13: High-cost Credit … Continue Reading

PS18/7: Staff incentives, remuneration and performance management in consumer credit

On 27 March 2018, the FCA published Policy Statement 18/17: Staff incentives, remuneration and performance management in consumer credit (PS18/17). In PS18/7 the FCA provides its response to the feedback it received to Consultation Paper 17/20: Staff incentives, remuneration and performance management in consumer credit. It also publishes the final rules for consumer credit firms.  … Continue Reading

Getting affordability right in consumer credit

On 15 March 2018, the FCA published a speech given by Jonathan Davidson (Director of Supervision – Retail and Authorisations, FCA) at the Credit Summit in London. The speech is entitled Getting affordability right in consumer credit. Key messages in Mr Davidson’s speech to consumer credit firms include: business models that are predicated on selling … Continue Reading

New credit card rules introduced by the FCA

The FCA has published Policy Statement 18/4: Credit card market study: Persistent debt and earlier intervention – feedback to CP17/43 and final rules (PS18/4). In PS18/4 the FCA sets out the responses it received to Consultation Paper 17/43: Credit card market study – persistent debt and earlier intervention remedies (CP17/43). In CP17/43 the FCA set … Continue Reading

PRA Dear Chair letter – follow-up to PRA Statement on consumer credit

On 4 July 2017, we blogged that the PRA published a Dear Chair letter which follows up on its Statement on consumer credit. The PRA statement raised ten issues for firms to consider and firms with material consumer credit exposures were required to respond to the PRA by September 2017, with responses to be approved by … Continue Reading

Who’s driving consumer credit growth?

The FCA has published its latest insight article entitled Who’s driving consumer credit growth? To build a better picture of what is driving consumer credit growth the FCA requested credit reference agency data for one in ten UK consumers. Having examined this data to assess possible risks from recent credit growth, the article summarises three … Continue Reading

Second FCA consultation on persistent debt and earlier intervention

In April 2017, we blogged that the FCA published Consultation Paper 17/10: Credit card market study: consultation on persistent debt and earlier intervention remedies (CP17/10). CP17/10 proposed measures to tackle persistent credit card debt and encourage earlier intervention. In particular, the FCA set out proposed new rules about the treatment of customers whose debt persists … Continue Reading
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