FCA roundtables on high-cost credit

The FCA has issued a paper summarising the issues and ideas raised by participants in the FCA roundtables, held in September and October.

The roundtables covered discussions on (i) alternatives to high-cost credit and (ii) the provision of essential goods.

The following key themes emerged from the discussions:

  • alternative lenders face challenges in accessing commercial capital at a reasonable cost and accessing capital that covers first losses;
  • alternative lending is most effective as part of a wider package of services;
  • clarity about the regulatory boundary and compliance with regulatory requirements could support more cross-referrals and reduce barriers to community-level provision of alternatives to high-cost credit;
  • data sharing or verification by government/local authorities could support alternative lenders to reduce costs of accessing data and fill gaps in traditional data sources. There are opportunities for exploring new types of information about consumers that could support their access to alternative lending;
  • there are opportunities for public bodies and others to take a greater advocacy role in raising awareness about alternative lending; and
  • further provision of essential goods by social housing providers can be encouraged by providing greater clarity about funding sources, a clear pathway to delivery and advocacy on the social benefits.

The FCA commented that it is exploring the issues raised at the roundtables further and aim to identify opportunities for increasing access to alternatives and make further recommendations in its Spring Consultation Paper 2018.