United Kingdom

Topic: Consumer credit

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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

Law Commission final Goods Mortgage Bill and report

In September 2017, we blogged that the Law Commission published a report on Bills of Sale following an earlier consultation on the reform of Bills of Sale Acts. The Law Commission has now published a report on its proposed Goods Mortgages Bill, together with a final version of the draft Bill. When finalised the draft … Continue Reading

Consumer credit income – what to report

The FCA has published a new webpage regarding what consumer credit firms need to report. The FCA charges consumer credit firms annual fees based on data in the CCR002 or CCR007. The new webpage outlines what consumer credit firms need to report to ensure that they are charged correctly. The webpage also covers common scenarios … Continue Reading

Rent-to-own firm providing redress for unfair treatment of customers

The FCA has announced that BrightHouse, a rent-to-own firm, has committed to pay over £14.8 million to 249,000 customers in respect of 384,000 agreements for lending which may not have been affordable and payments which should have been refunded. BrightHouse (a trading name of Caversham Finance Limited) is a rent-to-own firm which provides household goods … Continue Reading

FCA Dear CEO letter regarding consumer credit firms handling of complaints

The FCA has published a Dear CEO letter that it has sent to consumer credit firms regarding the handling of complaints. Key points in the Dear CEO letter include: resolving complaints effectively is an important way for firms to identify and correct mistakes in the treatment of customers, and an important means to identify and … Continue Reading

Change to credit card industry voluntary agreement on credit limit increases

The FCA has published a letter it has sent to UK Finance from Mary Starks, FCA Director of Competition and Economics, relating to the development of a voluntary industry agreement to give credit card customers greater control over credit limit increases. The letter notes that voluntary industry agreement has two components: (i) an agreement to … Continue Reading

FCA feedback statement on high-cost credit

In November 2016, we blogged that the FCA published a Call for Input on high-cost short-term credit (HCSTC), including a review of the HCSTC price cap. The FCA has now published Feedback Statement 17/2: High-cost credit: Including review of the high-cost short-term credit price cap (FS17/2). Among other things, FS17/2 notes the following: HCSTC price … Continue Reading

FCA consultation paper on assessing creditworthiness in consumer credit

The FCA has published Consultation Paper 17/27: Assessing credit worthiness in consumer credit: Proposed changes to FCA rules and guidance (CP17/27). In CP17/27 the FCA sets out proposed changes to its rules and guidance on assessing creditworthiness, including affordability, in consumer credit to clarify its expectations of firms. Whilst the FCA does not think that … Continue Reading

PRA statement on consumer credit

The PRA has published a statement on consumer credit following its review of consumer credit lending, which examined PRA-regulated firms’ asset quality and underwriting practices for credit cards, unsecured personal loans and motor finance. The statement summarises the findings from the PRA review and outlines issues arising for PRA-authorised firms that provide consumer credit to … Continue Reading

FCA consults on staff incentives and performance management in consumer credit firms

In August 2015, the FCA launched its Thematic Review: Staff remuneration and incentives. The FCA reviewed the incentives and the performance management policies and practices for sales and collection staff at 98 consumer credit firms. Following the results, the FCA found that a significant proportion of firms had: high risk financial incentives and/or performance management … Continue Reading

New industry guide on lending to vulnerable customers

The UK Cards Association (UKCA) and the Finance & Leasing Association (FLA) have co-published a guide for lending to vulnerable customers, together with a data related report. The guide is designed to help finance providers identify and support customers in vulnerable situations when applying for credit, whether face-to-face, over the phone, online or through an … Continue Reading

FCA consults on persistent credit card debt and earlier intervention remedies

On 28 July 2016, we blogged that the FCA published its final report on the credit card market study (CCMS). In that market study the FCA found that while the credit card market works well for most consumers, it had significant concerns about the scale and persistence of potentially problematic debt. The FCA set out … Continue Reading

FCA webpage on limitations on debt permissions

The FCA has published a webpage for consumer credit firms about limitations on debt permissions. The webpage notes that some firms with the ‘no debt management’ limitation may be carrying out debt management activities and that the limitation they hold is not appropriate for their business. The webpage also notes that rather than the ‘no … Continue Reading

CMA issues guide on Payday Lending Market Investigation Order 2015 to payday lenders

The Competition and Markets Authority (CMA) has published a guide for payday lenders regarding the rights and obligations created by the Payday Lending Market Investigation Order 2015 (the Order). The guide covers: the “cost of borrowing” definition (Article 2 of the Order); the publication of information on an FCA-authorised payday loan price comparison website (Part … Continue Reading

FCA finalised guidance on guarantor loans and default notices

The FCA has published Finalised Guidance 17/1: Guarantor loans: default notices (FG17/1). FG17/1 concerns the FCA’s interpretation of the requirement in section 87 of the Consumer Credit Act 1974 to serve a default notice before the creditor (or owner) enforces a guarantee or indemnity following breach of a regulated agreement. The FCA previously consulted on … Continue Reading

FCA firms criminal action against individual acting as unlicensed consumer credit lender

The FCA has announced that it is taking its first criminal action against an individual who has been acting as an unlicensed consumer credit lender. The FCA alleges that the individual conducted a regulated activity without authorisation, in breach of section 19 of Financial Services and Markets Act 2000, over a number of years by … Continue Reading
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