The FCA has published Consultation Paper 15/6: Consumer credit – proposed changes to our rules and guidance (CP15/6).

In CP15/6 the FCA is consulting on changes it intends to make to its consumer credit regime. Key proposals include those that relate to:

  • guarantor lending. The FCA proposes to require firms to provide adequate pre-contract explanations to guarantors and to assess the guarantor’s creditworthiness. Other obligations are to be imposed on firms regarding guarantors, including treating guarantors fairly and with forbearance if they are in financial difficulty;
  • high-cost-short-term credit. The FCA proposes to remove the exemption from the requirement to include a risk warning in financial promotions;
  • financial promotions. The FCA proposes to amend its rules regarding relative prominence and the circumstances in which promotions must include a representative annual percentage rate of charge, and to restate as a rule the current guidance in Principle 7 (that communications should be clear, fair and not misleading); and
  • arrears default and collection. The FCA proposes to amend its rules to reflect a policy intention and allow firms to introduce continuous payment authority to collect repayments where a customer is in arrears or default and the lender is exercising forbearance.

The FCA is also inviting comment on whether it should retain or modify its rules on credit broking that were introduced in Policy Statement 14/18, and whether to introduce additional rules.

The FCA also sets out proposals for amendments to the Consumer Credit sourcebook in relation to the implementation of the Mortgage Credit Directive.

The deadline for comments on CP15/6 is 6 May 2015.

View Consultation Paper 15/6: Consumer credit – proposed changes to our rules and guidance, 24 February 2015