United Kingdom

Topic: Consumer credit

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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

FCA sets out expectations of consumer credit firms

On 21 March 2019, the FCA published a speech from Jonathan Davidson, Executive Director of Supervision – Retail and Authorisations, on the FCA’s interaction with the consumer credit sector. Highlights from the speech include: the FCA will be doing further work to understand both the motivation for, and the impact of, relending on both consumers … Continue Reading

FCA Portfolio Strategy letter to firms providing high cost lending products

On 6 March 2019, the FCA published a Dear CEO letter it had sent to firms setting out the regulator’s view of the key risks that high cost lenders pose to their consumers or the markets they operate in. The Dear CEO letter applies to firms providing the following products: guarantor loans; high-cost short-term credit … Continue Reading

FCA acts to address unclear and excessive motor finance costs

On 4 March 2019, the FCA published its final findings following a review of the motor finance sector. The FCA wanted to understand the use of motor finance products, and to assess the sales processes employed by firms and whether the products could cause consumer harm. The FCA reports that it has serious concerns about … Continue Reading

FCA announces proposals to fundamentally reform the way banks charge for overdrafts and extends protections for other high-cost credit products

Introduction On 18 December 2018, the FCA announced the next package of measures forming part of its high-cost credit review. It has announced proposals to change how banks charge for overdrafts. It has also made new rules strengthening the protections for consumers using home-collected credit (doorstep lending), catalogue credit and store cards and it is … Continue Reading

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
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