On 28 January 2020, the FCA published a letter it had sent to banks ahead of its new rules on overdraft pricing coming into force on 6 April 2020. The FCA is seeking to understand more about banks’ overdraft pricing and the measures they have in place to help customers who may be adversely impacted by the changes.
The FCA has asked banks to voluntarily provide information as to how they have arrived at their new overdraft rates. The information should include the internal and external factors considered when setting the overdraft rate, explain how these factors were taken into account, and give an overview of decision-making executive meetings where setting the new rates was discussed, including attendance lists. The FCA also requests for a summary of the bank’s approach to dealing with customers who will be worse off following the pricing changes and the measures that are being taken to support these customers. The FCA is particularly seeking information on the number of customers who will be worse off and the strategy involved in communicating and supporting customers to deal with this change.
The FCA asks banks to supply this information by 10 February 2020. The FCA states that it may want to follow up with banks on receipt of this information to discuss in further detail.