The FCA has published a speech by Jonathan Davison (FCA Director of Supervision: retail and authorisations) on balancing regulatory objectives in the consumer credit market. Points of interest include:

• the FCA has determined around 15,000 applications from new businesses wanting to enter the consumer credit market since it took over from the Office of Fair Trading in April 2014. The FCA anticipates that it will continue to see new personal lenders entering the market as they take advantage of the current high margin, low interest rate landscape;
• affordability and the treatment of customers in financial difficulty are identified by Mr Davidson as being two particular risks currently facing the personal lending market;
• the FCA has almost completed its thematic review into staff remuneration in consumer credit firms;
• the FCA’s credit card market study has identified long-term persistent debt as a major area of concern and will be consulting on proposals how to deal with this issue; and
• the FCA believes that the peer-to-peer (P2P) lending sector is an important source of innovation. It is keeping a close eye on the P2P market to ensure that firms do not create affordability issues for borrowers and credit risk for lenders by lowering underwriting standards.

View FCA speech on balancing regulatory objectives in consumer credit market, 27 September 2016