Category Consumer Credit

New Financial Services head at Womble Bond Dickinson

We are delighted that Jonny Williams has joined the financial services regulatory team at Womble Bond Dickinson UK. More information on Jonny and his appointment can be found here.

Evaluation of Consumer Credit Directive

The European Commission has opened a consultation to invite views from a range of stakeholders on the functioning of the Consumer Credit Directive (CCD). The purpose of the evaluation is to consider whether the CCD is still fit for purpose given  market developments in the ten years since its adoption in 2008. Responses are invited […]

FCA publishes sector views

FCA has published its “Sector Views” setting out its observations from monitoring its 7 selected sectors of: retail banking retail lending general insurance and protection pensions and retirement income retail investments investment management and wholesale financial markets It produces this review to inform its overall approach and ultimately its business plan. The studies identify where […]

FCA ‘Dear CEO’ letter on misleading financial promotions

The FCA has published a ‘Dear CEO’ letter in which it provides clarity about the communication and approval of financial promotions by regulated and unregulated businesses. The FCA has published the letter after it has recently become aware that firms have been issuing financial promotions which suggest or imply that all the activities they undertake are […]

FCA consults on Brexit contractual continuity provision

At the end of last year, the the Treasury published draft regulations making provision for contractual certainty for firms currently passporting into the UK in the event of a ‘hard’ Brexit. Following this, the FCA has published CP19/02 on Brexit and contractual continuity.  This consultation paper is aimed at such incoming firms.  It consults on […]

Up next from FCA

FCA’s latest Policy Development Update highlights a number of publications due before the end of Q1 2019: a policy statement on general standards and communication rules for payment services and emoney providers; consultation and discussion on the investment platforms market study remedies; policy statement on 2019/20 fees and levies; consultation on recovering the costs of […]

FCA opens window for CMCs to register for temporary permission

In December 2018, the FCA confirmed that as part of its take over of the regulation of CMCs from April 2019, it would require CMCs to register for temporary permission in order to continue to operate from April, and pending submission and approval by the FCA of  a ‘full’ application to continue to do business. […]

PRA consults on Brexit measures

As part of its preparation for onshoring EU legislation, the PRA has published CP32/18.  This consultation paper contains two consultations: the first sets out the PRA’s proposals regarding the PRA Rulebook and the Binding Technical Standards (BTS) that are to come within the PRA’s remit; the second relates to BTS that will come within the […]

FCA publishes guidance for social landlords

The FCA has published final guidance for social landlords to help them understand when they may be acting as a credit broker in the course of assisting tenants find lower cost credit providers. FG18/6 will assist such social landlords in identifying whether they are likely to need authorisation and if so how to go about […]

FCA publishes feedback and further consultation regarding catalogue and store credit

Earlier this year, the FCA published CP18/12, which proposed measures to reduce consumer harm and strengthen protections for customers of home-collected credit, catalogue credit and store cards. Following this, the FCA has published CP18/43, which: responds to feedback received to this earlier consultation paper and sets out final rules and guidance; includes finalised guidance for registered […]

FCA consults on tacking bank overdraft charges

As part of its ongoing work to tackle high cost credit, the FCA has announced proposals to restrict the charges banks are able to impose for overdrafts. The FCA is proposing a package of measures that include stopping firms from charging higher fees for unannounced overdrafts, controlling overdraft charges, and requiring firms to work more […]

FCA final rules and guidance for CMCs

Following a consultation earlier this year, the FCA has published a policy statement setting out the new rules and fees that will apply to claims management companies (CMCs) from April 2019. From 1 April 2019, the FCA will become the regulator of CMCs that are established or serve clients in England, Wales and Scotland. FOS will […]

FCA publishes final rules on expansion of FOS jurisdiction to SMEs

The FCA has now published final rules confirming the expansion of the jurisdiction of the FOS to include certain SME customers. The new rules will mean that from 1 April 2019, the FOS will be able to hear complaints from SMEs who meet two of the three following criteria – fewer than 50 employees; annual […]

FOS consults on plans for 2019/20

The FOS has published a consultation on its plans and budget for 2019/2020. It notes that from April 2019, its jurisdiction will be expanded by the addition of two significant areas of work: complaints made by SME customers of financial services, and complaints made by customers of claims management services. The consultation questions include inviting […]

New Corporate Governance Principles published

The Financial Reporting Council has published the final version of new Corporate Governance Principles for large private companies. We have published an article that summarises and discusses these Principles.

FCA publishes quarterly consultation

FCA’s latest quarterly consultation proposes rules that: amend SUP 16 to address FCA’s concern that it does not always hold accurate “firm details” by requiring an annual accuracy check and removing the option some firms currently benefit from to update details other than using Connect; and add the Association of Accounting Technicians to the list of bodies […]

EC Review of the Distance Marketing Directive

The European Commission has launched a review of the Distance Marketing Directive (DMD) to assess whether it is relevant, effective, efficient, and in line with other EU legislation. The review follows an announcement by the Commission in its 2019 work programme, that it would carry out an evaluation of the DMD in line with the better regulation principles. […]

CMA Consults on Annual Plan 2019/2020

The Competition and Markets Authority (CMA) is consulting on its proposed Annual Plan, which sets out its plans and priorities for 2019 to 2020. Subject to the outcome of the Brexit negotiations, the CMA plans to give greater priority to potential market studies and investigations as it considers future work. The themes which it proposes should carry […]

FCA publishes approach to authorisation and feedback statement

Following a consultation last year, the FCA has published the ‘FCA Mission: Approach to Authorisation’ and feedback statement. This document includes reference to the introduction of a new range of tools to help firms submit complete authorisation applications.  This should minimise the risk that submitted applications will be deemed incomplete and the time for assessment […]

FCA delays Credit Information Market Study

FCA announced today that it will be delaying the launch of its Credit Information Market Study Terms of Reference until June 2019. The delay is a result of the FCA having to prioritise the market study on general insurance pricing, which launched on 31 October 2018 but was not originally part of its business plan.

FSB announces appointment of new FSB Chair and Vice Chair

The Plenary of the Financial Stability Board (FSB) has announced the appointment of Randal K. Quarles (Governor and Vice Chairman for Supervision at the US Federal Reserve) as its new Chair and Klaas Knot (President of De Nederlandsche Bank) as Vice Chair, for a three-year term starting on 2 December 2018. Randal K. Quarles will replace […]

FCA consults on proposed price cap on the rent-to-own market and confirms final rules on extended warranties

The FCA has published a consultation paper (CP18/35) setting out its proposals to  introduce a price cap on rent-to-own (RTO) firms, summarising the feedback to the consultation carried out in May 2018 on high-cost credit (CP18/12) , and its final rules on a point-of-sale ban on extended warranties alongside the sale of an RTO agreement. In its consultation carried […]

CMA proposes changes to the Payment Protection Insurance Market Investigation Order 2011

In the light of the implementation of IDD, the CMA is proposing to amend the Payment Protection Insurance Market Investigation Order 2011 (Order). Currently, the Order requires PPI providers to send policyholders and Annual Review document, which contains specified information, including a policy summary. The CMA proposes that the Order should mandate that the reference […]

Call for interest in new payment Standards Advisory Panel

The Bank of England and Pay.UK are inviting expressions of interest from senior stakeholders who could represent the payments industry on a newly created Standards Advisory Panel.  The new Panel will focus on the implementation of ISO20022, but also cover also payments standards for the UK. The deadline for applications is Monday 10 December 2018.

FCA publishes final guidance on PPI complaints and proposes re-opening closed complaints

Following its consultation in July 2018 on handling complaints  about regular premium PPI, the FCA has published finalised guidance that confirms that firms should assess PPI commission disclosures not only at point of sale, but on an on-going basis. The FCA is also consulting on new rules that would require firms that sold relevant products […]

FCA evaluates bringing additional benchmarks into the regulatory and supervisory regime

FCA has today published Evaluation Paper 18/2 on the impact of bringing additional benchmarks into the regulatory and supervisory regime. The paper is the second of a new series of FCA evaluations on its past interventions. Background Misconduct and benchmark manipulation cases and FSA investigations led the Government to ask Martin Wheatley to establish an […]

UK retail payments authority re-named and re-branded

The New Payment System Operator (NPSO) has today announced its new name and brand: Pay.UK The new name and identity is aimed at helping the payments authority to better promote its core purpose, which is to transform the “UK’s payment infrastructure to enable a vibrant economy – as well as being a logical progression following […]

FCA Feedback Statement on Digital Regulatory Reporting

The FCA has published a feedback statement on digital regulatory reporting. This follows the FCA’s call for input on smarter regulatory reporting in February 2018. The FCA found that most respondents agreed that there are significant potential benefits to be gained by introducing digital regulatory reporting, with the most commonly cited benefit being increased efficiency. However, […]

FCA WRITES TO FIRMS ON AFFORDABILITY OF HCSTC LOANS

The FCA has published a ‘Dear CEO’ letter setting out the issues surrounding the increase in complaints about unaffordable lending (including complaints about a ‘chain’ of loans over an extended period), and how it expects high-cost short-term credit (HCSTC) firms to manage the impact. The FCA reminds firms that complaint-handling procedures should ensure that a […]

Treasury updates Brexit SIs

Treasury has published some new draft statutory instruments to be made under the EU (Withdrawal) Act, or announced plans to make them, and also updated existing drafts. New or updated documents include Regulations on : plans for the Solvency II and Insurance measures Bank Recovery and Resolution Credit Rating Agencies (FCA has also published an […]

FCA publishes Brexit consultations following HMT Guidance

As heralded at the end of last year, the FCA has now published two consultation papers that make provision for operations in the event of a ‘hard’ Brexit next March. The first consultation sets out changes to the FCA’s Handbook and to those EU Binding Technical Standards, which, it is proposed, would be incorporated directly […]

FCA sets out its expectations on debt packager firms providing debt advice and counselling services

The FCA has published a ‘Dear CEO’ letter to debt packager firms, setting out its expectations on the provision of debt advice and counselling services. The FCA is concerned about the poor standards it has seen after undertaking a review of a small sample of debt advice provided by debt packager firms. The FCA stated […]

Up next from FCA

FCA’s latest policy development update promises various publications before the end of this year, including: policy statement on the approach to the final RTS and EBA guidelines under PSD 2, in December; policy proposals on regulatory fees and levies for 2019/20, in November; and review of permitted links rules for insurers in relation to Patient […]

FCA makes new rules

FCA has made three new rules instruments at its September board meetings: the Individual Accountability (Dual-Regulated Firms) Instrument 2018: this instrument makes significant changes to SYSC as well as to COCON, COND, APER FIT and SUP, and several other changes to many other handbook modules and guides. The changes mainly take effect on 10 December […]

FCA thematic review on credit broking remuneration models

The FCA has published its thematic review on the impact of credit broking remuneration models at the point of sale. The thematic review covered a wide variety of credit brokers offering loans or finance provided by a third party. In its 2017/2018 Business Plan, the FCA set out its intention to focus on inter-firm remuneration […]

FCA consults on applying SM&CR to CMCs

The FCA has opened a consultation that sets out how it will apply the Senior Managers and Certification Regime (SM&CR) to Claims Management Companies (CMCs), following taking over regulation of them from 1 April 2019. The consultation also sets out when SM&CR may apply to CMCs, and what action they will need to take. The […]

ASA rules on RAPR prominence in TV ad

The ASA has published a ruling which upheld a complaint that the representative APR (RAPR) in an advertisement for Sunny Loans was insufficiently prominent.  The advert’s ‘incentives’ that triggered then requirement for the RAPR were the lines ‘At Sunny they don’t charge fees at all’, and ‘Loans with no fees from £100’, delivered in voiceover and […]

Firms’ permissions cancelled for failure to be open and co-operative with the FCA

The FCA has cancelled the Part 4A permissions of two firms, Causeway Group Limited and Prime Render Solutions Limited . The cancellation of the permissions is due to both firms failing to satisfy the suitability Threshold Condition, in that the FCA was not satisfied that the firms are fit and proper persons having regard to all the circumstances, […]

Law Commission confirms status of electronic signatures

In December 2017 the Law Commission confirmed that one of the projects it would be working on was addressing the absence of explicit case law and legislation that has given rise to uncertainty as to the validity of electronic signatures in some cases. Consequently, the Law Commission has now published early conclusions from its review […]

FSB launches peer review of LEIs

The Financial Stability Board has published the Summary Terms of Reference of a thematic peer review of the implementation of the Legal Entity Identifier. The thematic review seeks feedback from a range of stakeholders on issues such as: awareness and adoption of the LEI in various jurisdictions; types of private sector uses of the LEI; […]

FCA publishes interim report on CCA review

The FCA is progressing with its statutory obligation to review the CCA, by publishing an interim report on its review. The interim report sets out the FCA’s initial views on whether the repeal of CCA provisions would adversely affect consumers. Comments are requested by 2 November 2018; the final report must be delivered by 1 April 2019. […]

Tribunal rules on Validation Order on credit agreements brokered by unauthorised firm

The Tribunal has handed down its decision in the case of Plexedes Chickombe and 44 others v the FCA and Clydesdale Financial Services Limited trading as Barclays Partner Finance (Clydesdale) as interested party. The case concerned consumer credit agreements that were entered into through an unauthorised broker. Clydesdale had discovered that 1,444 regulated credit agreements to finance the […]

FCA’S FINAL RULES ON ASSESSING CREDITWORTHINESS IN CONSUMER CREDIT

The FCA has published a policy statement setting out its final rules and guidance on assessing creditworthiness in consumer credit. The policy statement summarises and responds to the feedback the FCA received to the July 2017 consultation paper (CP12/27). In particular, the changes set out in the policy statement clarify the FCA’s existing rules and guidance […]

FCA updated guidance for firms outsourcing IT

The FCA has updated FG 16/5, ‘Guidance for firms outsourcing to the ‘cloud’ and other third party IT services’. This update takes account of the publication of the European Banking Authority’s recommendations, and changes to relevant legislation.    

FCA publishes research note on credit card users’ debt

The FCA has published a note that summarises research conducted as part of the FCA Credit Card Market Study into helping credit card users who are only making the minimum payments increase the rate at which they repay their debt. In particular, the research describes the effectiveness (or otherwise) of a series of experiments designed […]

Corporate governance reporting and the impact on large private companies

We have written an article on the new corporate governance reporting requirements for certain large private companies. The requirements will come into force on 1 January 2019 applying to financial years beginning on or after 1 January 2019, with reporting effectively commencing in 2020 for the previous year. We also cover the consultation launched on […]

FCA bans individuals for misleading consumers

FCA has banned the 4 former directors of a now-dissolved credit broker, Secure My Money Limited. It found the firm misled customers into thinking they had been approved for short term loans and as a result took fees of over £7.2m from around 124,000 online customers. The failings happened over an 8 month period. Customers […]

FCA publishes intervention approach documents

On a new page on its website, ‘Measuring our impact before we intervene‘, the FCA has published a group of documents that aim to provide an indication of how the FCA assesses the likely impact of its policies. These documents consist of: a paper setting out the FCA’s approach to conducting cost benefit analyses for […]

FCA publishes Annual Report

FCA has published its Annual Report and Accounts for 2017/18. The report includes details of: FCA’s work preparing for Brexit; key regulatory changes such as MiFID 2 and PSD 2; work on SMCR extension; thematic work on high cost credit and consumer debt; and the PPI customer information campaign. It also articulates what FCA has done […]

The FCA’s discussion paper on the introduction of a duty of care

Alongside the Approach to Consumers document, which was published on 17 July 2018, the FCA has published a discussion paper (DP18/5) on the introduction of a duty of care for financial services firms. In response to the FCA’s consultation on its future approach to consumers (carried out in November 2017), some stakeholders raised concerns that […]

The FCA’s Approach to Consumers

Following its consultation in November 2017, the FCA has today published its Approach to Consumers document which aims to address the concerns raised in the feedback to the consultation. The consultation took place following the FCA’s April 2017 Mission statement, which set out how the FCA intended to serve the public interest and deliver public value to the […]

Treasury publishes Brexit consumer credit changes

Treasury has published a draft statutory instrument setting out changes to consumer credit legislation consequent on Brexit. The draft has not yet been laid before the relevant parliamentary committees for “sifting”.  Once the Committees are ready, it will be laid appropriately. Treasury will need to amend the following legislation to address situations where retained EU […]

FCA and PSR Chair discusses potential future algocracy

Charles Randell, the recently appointed Chair of the FCA and the PSR, has delivered a speech, in which he discussed the increasing dominance of algorithms in our day to day lives, and noted some of the consequent issues that will need to be grappled with, as  the rise of Big Data, AI and machine learning […]

Banking (Cash Machine Charges and Financial Inclusion) Bill 2017-19

Parliament has announced that the second reading of the Banking (Cash Machine Charges and Financial Inclusion) Bill 2017-19 is scheduled to take place on Friday 23 November 2018. The Bill contains provisions which prohibits cash machine charges; requires the Financial Conduct Authority to supervise an access to banking standard; imposes penalties for breaches of that standard; establishes a […]

FCA thinks about price discrimination

FCA has published a paper looking at how it should approach fairness in price discrimination in financial services. It notes that price discrimination is not in itself unfair as practices such as student discounts are widely accepted. But others are more controversial, such as where longstanding customers receive a worse deal than new ones. Views […]

Discussion Paper on building the financial sector’s operational resilience

The Bank of England, the PRA and FCA have published a joint discussion paper on its approach to improve operational resilience in the financial sector. The regulators envisage that boards and senior managers can achieve better standards of operational resilience through increased focus on setting, monitoring and testing specific impact tolerances for key business services. […]

FCA consults on regular premium PPI complaints handling

FCA is consulting on new guidance on handling complaints about regular premium PPI, to deal with an uncertainty which has arisen since the post-Plevin rules.  The Plevin judgment and the rules that followed it say that if a lender fails to disclose at point of sale a large commission payable out of the PPI premium […]

Evaluation of the Consumer Credit Directive

The European Commission has published a roadmap on the Consumer Credit Directive (Directive). The Commission is looking to assess: effectiveness: whether the original objectives of the Directive have been achieved; efficiency: the functioning of the Directive from a simplification and burden reduction perspective; coherence: how the Directive works together with other legislation in the field of […]

Themes from thematic reviews

We recently wrote an article for Compliance Monitor setting out themes from recent FCA thematic reviews.

FCA publishes update on Strategic Review of Retail Banking Business Models

The FCA has published a progress report on its ongoing Strategic Review of Retail Banking Business Models. The purpose of the Review is to consider the sources of competitive advantage that may have helped the major banks retain their market share, and from that analysis consider the potential for change and the impact of that […]

HMT, Bank of England and FCA set out approach to onshoring financial services legislation

The Treasury, the Bank of England and the FCA have published information about how financial services legislation will be on-shored under the EU (Withdrawal) Act, in particular to ensure the (hopefully unlikely) ‘hard Brexit’ scenario is addressed, if the negotiated implementation period is not able to take effect from March 2019. The Treasury intends to lay […]

Mansion House 2018: Speech by the Chancellor of the Exchequer

HM Treasury has published a speech by Philip Hammond, Chancellor of the Exchequer, which was delivered at the annual Mansion House dinner. In his speech, Mr Hammond focused on Brexit and financial services. He said that the UK needs to ensure that it remains a world leader in innovation, and extend London’s position as the […]

FCA Financial Lives Survey

The FCA have published a report on its Financial Lives Survey 2018. The survey is the FCA’s largest tracking survey of adults and their finances, covering  13,000 face-to-face and online interviews. Key findings include: compared with the UK average of 50%, 55% of adults in the North West and 54% of adults in rural areas […]

Treasury’s response to call for evidence on breathing space scheme

HM Treasury has published a summary of the submissions received to the call for evidence on problem debt. The call for evidence was issued in October 2017 to gain further insight from the debt advice sector and creditors about how best to design, implement, administer and monitor a six-week breathing space scheme and statutory debt management […]

Up next from FCA

FCA’s latest Policy Development Update heralds a policy statement on fees and levies rates in July. Otherwise its timetable is quiet, with a policy statement on the MMF Regulation due at some point together with feedback on an increasing number of proposals from quarterly consultations going back 2 years.

FCA’s high-cost credit review published

The FCA has concluded its review into high-cost credit, and based on issues it found has published two consultations: CP18/12 on rent-to-own, home-collected credit, catalogue credit and store cards, and alternatives to high-cost credit, and CP18/13 on arranged and unarranged overdrafts. In the rent-to-own category, which covers hire-purchase and condition sale agreements, it found that […]

FOS Annual Review published

The FOS has published its Annual Review for 2017/2018. Many of the complaints statistics highlight products that are the subject of ongoing regulatory scrutiny and activity: the FOS notes significant increases in complaints in home credit, hiring, leasing and renting, and payday loans: putting to one side PPI, one in four new complaints related to […]

ASA Ruling on Intelligent Lending Ltd t/a Ocean Finance

The Advertising Standards Authority (ASA) upheld a complaint about a credit card advertisement broadcast by Intelligent Lending Limited t/a Ocean Finance. The complainant challenged whether the advertisement should have included a representative APR. The radio advertisement, broadcasted in January 2018, stated “Apparently there are still some people who say they don’t want to apply for an Ocean credit […]

GOVERNMENT SCRAPS NEW GOODS MORTGAGES BILL

HM Treasury has published the response to its September 2017 consultation on the proposed Goods Mortgages Bill and has announced that it is no longer planning to introduce new legislation on this subject at this time. This follows a review of the existing legislation governing creation of security over goods by individuals which began in 2014. In a 2016 report, the Law […]

FCA makes new rules

FCA (in one case together with FOS) has made several instruments amending the Handbook. Changes include: changes to FEES (from 1 April) to ensure better mapping of tariff data and that Directive and non-Directive insurers are treated consistently. Further change creates a new fee-block for consumer credit lending as a mechanism for collecting the levy for […]

Wyman report on debt advice funding published

Peter Wyman’s report on a review of debt advice funding has been published. The report makes several recommendations, including: face-to-face advice should still be widely available but there should be general and phased shifts by free-to-client providers from face-to-face to phone and then to webchat; free-to-client providers should commit to 20% efficiency savings over the next 2 financial years, […]

Claims Management regulations published for consultation

As part of the proposed process of transferring the regulation of Claims Management Companies to the FCA, HM Treasury is consulting on draft regulations  that will form part of a final statutory instrument creating a new framework of regulation for Claims Management Companies (CMCs). The draft regulations set out the proposed permissions that CMCs will […]

BEIS publishes Green Paper on modernising consumer markets

The Department for Business, Energy and Industrial Strategy is consulting on proposals which, among other issues, seek to to improve the consumer experience in regulated markets for utilities, telecommunications and financial services and to ensure consumers buying and selling online benefit from new technology and business models, and have appropriate protection for their personal data. […]

ESAs report on key risks for H2 2017

The Joint Committee of the European Supervisory Authorities has published its report for the second half of 2017.  This report highlights the following potential sources of instability: repricing of risk premia uncertainties regarding the terms of Britain’s exit from the EU; cyber attacks; and climate change. The report urges firms and supervisory authorities to seek […]

FCA and PRA publish business plans

The FCA and the PRA have both published their business plans for 2018/2019. The FCA’s business plan shines a spotlight on consumer protection, including in relation to pension products and high-cost credit, as an area of concern for the forthcoming year, as well as ongoing programmes such as Brexit, and firms’ culture and governance (including […]

FCA and PRA consult on 2018/2019 regulated fee and levy rate proposals

The FCA and PRA have, separately, published consultation papers on regulated fees and levies for 2018/19. In its consultation paper, the FCA sets out the proposed 2018/19 regulatory fees and levies for itself, the Financial Ombudsman Service, the Money Advice Service, the Pension Wise service and HM Treasury’s illegal money lending expenses.  The FCA also […]

FCA PUBLISHES POLICY STATEMENT AND FINALISED GUIDANCE ON STAFF INCENTIVES, REMUNERATION AND PERFORMANCE MANAGEMENT IN CONSUMER CREDIT

The FCA has published a Policy Statement (PS18/7) and Finalised Guidance (FG18/2) on staff incentives, remuneration and performance management in consumer credit. The Policy Statement sets out final rules for staff incentives, remuneration and performance management in consumer credit firms. The Finalised Guidance sets out examples of good and bad practice observed by the FCA […]

Complaints Commissioner concerned about information sharing between FOS and FCA

In a recent report the Complaints Commissioner expressed concern about the absence of published information about how and in what circumstances information about live ombudsman cases may be shared between the FOS and the FCA. The complaint alleged that the FCA illegally influenced the FOS in its handling of complaints against a firm represented by […]

FCA sets out supervision and enforcement approach

FCA has published a draft of its approach to enforcement and supervision. The documents follow its publication of its Mission, in which it committed to publishing a series of documents setting out how it carries out its main activities. The approach to supervision explains FCA’s commitment to being forward-looking and pre-emptive, focusing on firms’ cultures […]

Andrew Bailey speaks on transforming culture in financial services

The FCA has published a speech by Andrew Bailey, FCA Chief Executive, on transforming culture in financial services. Mr Bailey highlights the following issues: work on firm culture is an important priority for the FCA; essays in the FCA’s Discussion Paper on transforming culture in financial services indicate that culture is about encouraging and incentivising good things, […]

FCA speaks on affordability

Jonathan Davidson has spoken on getting affordability right in consumer credit. He said that as the UK consumer credit sector is growing, so are concerns about excessive debt. FCA does not consider the sector has yet reached levels of debt that are likely to be harmful to lenders. His focus was on harm to borrowers, […]

BSB publishes annual review

The Banking Standards Board has published its annual review.  Its key point is that, last year, it carried out the largest ever survey of behaviours, competence and culture in UK banking. It noted that the scores to its 36 questions improved in comparison with the previous year for 25 of the questions, and declined for […]

FCA updates on motor finance

FCA has updated on its work reviewing the motor finance sector. So far, it has drawn several comforting conclusions, including around general default rates. But the 3% of customers who have the lowest credit ratings have higher arrears and default rates. It also notes that commission arrangements could lead to dealers arranging more expensive than […]

FCA outlines approach to authorisation

Sarah Rapson has spoken of FCA’s approach to authorising firms. She focused on FCA’s use of authorisation as a way to prevent harm, and its focus on using it proportionately. As a result, the information it asks firms for, and the degree of scrutiny it gives it, has to be linked to its assessment of […]

FCA looks back on past 5 years

John Griffith-Jones has reflected on FCA’s first 5 years of operation, since it took over from the FSA.  He outlined: highlights – specifying FCA’s engagement with pension exit charges, general insurance renewals, interest-only mortgage work, FX and LIBOR issues and reform, MiFID 2 implementation, the Innovation Hub, market abuse enforcement, fixing PPI, the asset management […]

FCA Discussion Paper on transforming culture in financial services

As part of its ongoing work on culture and governance, the FCA has published a discussion paper, comprising a series of essays from academics and industry thought leaders covering: what a ‘good’ culture might look like; the role of regulation and regulators; how firms might go beyond incentives; and how to change behaviour for the […]

FCA surveys firms passporting into UK

As part of its preparation for Brexit, the Government announced in December 2017 that it would, if necessary, introduce legislation to enable a ‘temporary permission’ scheme for EEA firms and funds which, following Brexit, can no longer rely on their passporting rights to do business in the UK. The FCA has published a survey to […]

FCA writes to CEOs on second charges and responsible lending

FCA has written a Dear CEO letter to firms that enter into regulated second charge mortgage contracts, asking them to review their lending processes and confirm to FCA that the firm is acting responsibly when lending and has systems, processes and controls to ensure this. FCA is worried, following a review it carried out to […]

FCA updates on consumer credit landscape

Andrew Bailey has spoken to the FLA on the current consumer credit landscape. He noted the constant fall in the real cost of debt which has supported the rise in household borrowing, and the growth in consumer credit particularly among the young. FCA has carried out several pieces of research to determine who is driving the growth […]

The FCA fines Vanquis £1,976,000 for failure to disclose full price of an add-on product

The FCA has fined credit card lender, Vanquis, £1,976,000 and ordered it to pay compensation to customers for failing to disclose the full price of an add-on product called Repayment Option Plan. In particular, the FCA found that Vanquis breached Principle 6 (Customers’ interests) and Principle 7 (Communications with clients) of the FCA’s Principles for […]

FCA publishes its final policy statement on new rules for the credit card market

Following a comprehensive study of the credit card market, the FCA has published its final policy statement on new rules for the credit card market. The new rules aim to provide more protection for credit card customers in persistent debt or at the risk of financial difficulty. Firms will be required to take series of […]

FCA updates on service standards

FCA’s new-look update on its service standards shows that it met most of its targets for various regulatory tasks, including authorisations, passport notifications, dealing with queries and customer satisfaction. However, it did fall slightly short on some applications, particularly consumer-credit related ones, and some of its work on passports.

FCA explains perimeter to Treasury Committee

Andrew Bailey has written to the Treasury Select Committee setting out a summary of the powers “FCA does not have”. It has been asked many questions in the context of the RBS GRG investigation. The letter sets out: FCA’s basic remit over regulated activities and its role as the UKLA as well as its powers […]

FCA review of Board Effectiveness

The FCA has published a report of the independent review into the effectiveness of its Board. The review was undertaken by Independent Audit Limited. The review involved interviews with Board members, a review of documentation and observance of Board and committee meetings. The report also sets out the following broad themes: aligning of activities into […]

FCA updates on high-cost credit sector

Following a Feedback Statement in which FCA identified key areas of concern in the high-cost credit sector, it has published an update on the work undertaken since the July 2017 publication. This presents an emerging picture for intervention in some markets, but equally a limitation on what can be achieved through traditional regulatory intervention. The […]

FCA consults on widening FOS access for small businesses

FCA has opened a consultation on plans to provide more small businesses with access to FOS. The changes proposed would allow FOS complaints redress to approximately 16,000 SMEs, charities and trusts, by changing the eligibility criteria to access FOS. Under the proposals, eligible businesses would be those that satisfy the following criteria: Under 50 employees; […]

FSCS PUBLISHES PLAN AND BUDGET FOR 2018/2019

The Financial Services Compensation Scheme (FSCS) has published its Plan and Budget for 2018/2019. The Plan and Budget outlines the FSCS’s expected management costs and initial levy forecasts financial services firms will pay next year. The FSCS expects to levy the industry £336m, for the nine months to 31 March 2019, up from £320m in […]

The PRA’s “Dear Chair” letter on consumer credit

On 17 January 2018, the PRA published a “Dear Chair letter” following a review on consumer credit lending (covering credit cards, personal loans and motor finance) and the publication of its statement on consumer credit in July 2017. The letter communicates the PRA’s key findings from the review and sets out points for firms to […]

FCA INSIGHT ARTICLE: Who is driving consumer credit growth?

The FCA has published an Insight article that considers who is driving consumer credit growth. Although regulators have relied upon aggregate data from larger lenders to monitor which lenders are driving credit growth, there are important gaps. For example, they do not include less-mainstream products that people with low incomes often rely on; and do not […]