Consumer Credit Regulatory News

Compliancy Services Directors
Our Directors and Consultants share their insights and opinions on the important regulatory issues facing the UK Consumer Credit sector.


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Do you have FCA debt adjusting / debt counselling permissions?
20th March 2017 - Financial Conduct Authority

Please note: Limited Permission firms are not affected by this notice

Limitations on debt permissions

Are you are a full permission firm with the permission of debt adjusting and/or debt counselling with a ‘no debt management’ limitation?

If so you will need to review the limitations on your FCA permissions to ensure they appropriate for your business.

The FCA has issued a notice setting out that the ‘no debt management’ limitation is not appropriate for certain debt activities, so it is important to check and if necessary vary your permissions.

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FCA updates consumer credit information sheets
19th October 2016 - Financial Conduct Authority

The FCA has updated the following consumer credit information sheets which firms are expected to use from the 18th January 2017. Until then, the current versions of the information sheets must be used:

Arrears (No.001) - Default (No.002) - High-cost short-term loans (No.003 ) - High-cost short-terms loans, peer-to-peer lenders (No.004) - Arrears, peer-to-peer lending (No.005).

The sheets are available in English and Welsh and can be printed in colour or mono.

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Remuneration in CRD IV firms: new guidance and changes to ‘Handbook’
28th September 2016 - Financial Conduct Authority

The FCA are consulting on proposals to help firms understand the rules that apply to their remuneration policies and practices, as the FCA bring some of their provisions in line with the European Banking Authority (EBA) Guidelines on sound remuneration policies (EBA Guidelines).

In addition, the FCA are proposing new non-’Handbook’ guidance designed to address some of the questions firms most frequently ask about how the FCA implement provisions under the EBA Guidelines, as well as more general provisions in the ‘Handbook’.

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EBA publishes final guidelines on the remuneration of sales staff
28th September 2016 - European Banking Authority

The guidelines apply to remuneration paid to staff employed by credit institutions, creditors, credit intermediaries, payment institutions and electronic money institutions

The guidelines are aimed at providing a framework for financial institutions to implement remuneration policies and practices that will improve links between incentives and the fair treatment of consumers and reduce the risk of mis-selling and resultant conduct costs for firms.

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Can we predict which consumer credit users will suffer financial distress?
3rd August 2016 - Financial Conduct Authority

People suffer financial distress when they face financial and non-financial difficulties from repaying their outstanding debts. This paper analyses the prevalence of financial distress, how this distress is related to consumer credit use, and whether financial distress can be predicted.

FCA rules require consumer credit lenders to assess the creditworthiness of loan applicants and the FCA is considering whether changes are needed to existing rules and guidance.This Occasional Paper is intended to inform discussion ahead of a future consultation paper on this topic.

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Responsibilities when accepting business from unauthorised introducers or lead generators
2nd August 2016 - Financial Conduct Authority

This alert, taken from the FCA website, is aimed at Investment advisers’ and authorised firms’ responsibilities when accepting business from unauthorised introducers or lead generators

It highlights some of the risks arising from authorised firms accepting business from unauthorised introducers/lead generators and/or other authorised firms (the ‘introducer’) and although directed at investment firms the overall message can apply to any firms that have introducers in any sector.

The messages the FCA wish to communicate come largley under the following groupings:

  • Areas of concern identified and warning signs
  • Regulatory requirements and what you should do next
  • Matters to be aware of

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Consumer credit: Response to the CMA recommendations on high-cost short-term credit
26th May 2016 - Financial Conduct Authority

In February 2015, the Competition and Markets Authority (CMA) published a final report on its market investigation into payday lending. This contained a package of remedies, some of which were to be implemented by the CMA, while others were recommendations to the FCA.

In this policy statement, the FCA set out their response to the feedback received to Consultation Paper (CP)15/33 Consumer credit: proposals in response to the CMA’s recommendations on high-cost short-term credit (October 2015) and publish final rules for price comparison websites (PCWs) comparing high-cost short-term credit (HCSTC) products.

There are also a number of issues in the FCA document relating to ongoing and future work undertaken or to be undertaken by the FCA. We have summarised these towards the end of this regulatory update.

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Guidance on Small and Medium Sized Business (Credit Information) Regulations
8th April 2016 - FCA

The Small Business, Enterprise and Employment Act 2015 ‘the Act’ contains measures aimed at improving access to credit information about small and medium sized business (SMEs).

In June 2015 the FCA consulted on guidance explaining the scope of ‘the Act’ which requires the FCA to monitor and enforce relevant requirements.The purpose of the guidance is to explain the scope of FCA functions in relation to Regulations.

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Call for Input: Review of retained provisions of the Consumer Credit Act
18th February 2016 - FCA

The FCA is conductng a review to simplify the CCA regime wherever possible, ensuring appropriate consumer protection whilst not overburdening firms. The review will take into account whether or not the provisions should remain as they are, be modified or updated.

Consumer Credit PS15/23 - feedback on CP15/6 and final rules and guidance
28th September 2015 - FCA

This Policy Statement includes the FCA’s responses to the feedback received to consultation CP15/6 Consumer Credit - proposed changes to our rules and guidance, published in February 2015 where the FCA proposed some relatively minor changes to rules and guidance in relation to credit brokers, lending (including guarantor lending), financial promotions and debt.

Having reviewed the feedback, the FCA are introducing the majority of the changes consulted on, but have made some modifications and are planning further work in some areas. Some of these changes came in to force on 28th September 2015 but most come in to force on 2nd November 2015. The policy statement also includes detail of further work the FCA are planning, including in relation to credit broking and guarantor lending.

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