FCA looks at next steps in consumer credit regulation

Nisha Arora has spoken on FCA’s priorities in regulating consumer credit. She noted that FCA has significantly improved outcomes for consumers using credit since FCA took over its regulation, but that there is much more to do.

The key shifts in FCA’s approach, to the innovative, assertive and adaptive regulator are essential to consumer credit regulation and in ensuring borrowers get products that they need and understand, and that consumers are treated fairly.

She spoke to the effects of the new Consumer Duty, which will drive firms to have a greater focus on consumer outcomes, and encourage them to test and fix products that aren’t having the desired outcomes. FCA’s new supervisory and enforcement approach will be informed by how it now wants to regulate.

The new emphasis will also inform its approach to regulating BNPL, on which it expects a government consultation over the next few weeks, which will be followed by FCA’s own proposals.

Finally, she spoke of work to support borrowers in financial difficulties. She noted that the tailored support guidance for firms that FCA issued early in the pandemic is still in place, and that, together with FCA’s deep dives into key areas, such as debt packaging and the credit information market study, will all help towards this. FCA is additionally looking at how best to protect users of high-cost credit.