On 26 March 2015, the FCA published a speech given by its Director of Strategy & Competition, Christopher Woolard. In his speech Mr Woolard reflected on the work the FCA has already done on consumer credit and looked ahead to what may be next.

In relation to the road ahead:

  • the FCA is currently consulting on the credit broking rules that came into effect in January 2015. It is also asking for suggestions on what its future policy approach should be to broker remuneration. Alongside that, it is proposing to require firms to provide adequate explanations to guarantors, assess their creditworthiness and treat them with forbearance. The FCA also wants to 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 urges firms to comment on these proposals;
  • if the FCA’s first year of consumer credit regulation focussed on particular products, the year ahead will look more towards addressing sector wide issues. The FCA will look at whether it should ban or restrict cold-calling, and also whether it can do more to facilitate the use of quotation searches across the sector as a whole;
  • whilst the FCA is still in the early stages of scoping, its business plan announced two new reviews. On the collection of unsecured debts the FCA will look at ways in which consumer credit debts are collected and the extent to which firms involved in the recovery and collection of debts are following the rules. The other review will look at staff remuneration and incentives in consumer credit firms, to assess how firms are managing the risk that their reward arrangements could encourage potentially undesirable behaviour that might lead to poor outcomes for consumers; and
  • the main risk that the FCA will be focusing on is a market-wide one – affordability. It will be looking at several issues, including how a wide range of firms assess affordability. This will lead to proposals to mitigate the risks that the FCA finds, which it will consult on.

View Journey to a sustainable credit market, 26 March 2015