REGULATORY

FCA consultation on introducing PPI complaints deadline

The Financial Conduct Authority (FCA) will consult on rules and guidance about how firms should handle payment protection insurance (PPI) complaints in the light of the Supreme Court's judgment in Plevin v Paragon Finance Ltd [2014] UKSC 61. The FCA considers that non-disclosure of commission of 50% or more of the premium should be presumed by firms to give rise to an unfair relationship under the Consumer Credit Act 1974. The FCA will also consult on what it describes as the "limited circumstances" where commission of less than 50% of premium could also give rise to an unfair relationship. The consultation will be published before the end of 2015 and will also include a proposal to introduce a general deadline for consumers to make PPI complaints. The proposed deadline is two years after publication of the new rules (likely to be Spring 2018). The FCA will expect the industry to pay for a communications campaign to let consumers know about this deadline.
FCA, 2 October 2015

FCA consultation on pension reforms: proposed changes to rules and guidance

The Financial Conduct Authority (FCA) has published a consultation (CP15/30) on pension reforms concerning proposed changes to FCA rules and guidance. In the context of using pension savings to repay debt, it is intended to make explicit the application of existing rules in the Consumer Credit sourcebook (CONC) which are relevant to debt collection and debt advice firms. The paper also reminds such firms that advising on the conversion or transfer of pension benefits is a regulated activity. The consultation runs until 4 January 2016.

FCA, 1 October 2015

FOS feedback statement on amending rules in relation to not-for-profit debt advice agencies

The Financial Ombudsman Service has published a feedback statement on its consultation to amend rules in the Dispute Resolution: Complaints sourcebook (DISP) with regard to not-for-profit debt advice bodies and the obligation to signpost customers to the availability of complaints information. 
The Financial Ombudsman Service, 30 September 2015

FCA overall complaints fall

The Financial Conduct Authority (FCA) has reported on the number of complaints it received between January and June 2015, finding overall complaints have fallen 2.1%. Banking and credit card complaints, however, have increased.

FCA, 30 September 2015

General Insurance Add-Ons Ban

The Financial Conduct Authority (FCA) have published a policy statement, PS15/22, setting out remedies in relation to the findings of a market study into general insurance add-ons which found that the way in which they were sold was harmful to customers. Although the rules will primarily affect the general insurance market (for which Finalised Guidance is provided), an opt-out ban will extend to other financial sectors. For example, the Consumer Credit sourcebook (CONC) will be amended to include a prohibition against agreements with customers under which there is a charge payable for an optional "additional product" unless the customer has actively chosen it. There will be a similar rule in the Banking: Conduct of Business sourcebook (BCOBS), but there will be an exception for borrower-lender agreements enabling a borrower to overdraw on a current account. The rules come into force on 1 April 2016. The Consumer Contracts (Information, Cancellation and Additional Charges ) Regulations 2013 already provide for a similar ban where the main sale is not a financial service or product.

FCA, 28 September 2015

UK

Lending Code revised

The Lending Standards Board (LSB) has published a revised version of the Lending Code last published in March 2011. The new edition removes reference to the Financial Services Authority and the Office of Fair Trading, includes debt collection agencies/debt purchase firms, and revises section 4 on credit assessment and on unauthorised credit card transactions, as well as clarifying the Board's role in monitoring UK Cards Best Practice Guidelines. The Building Societies Association has withdrawn as a sponsor to the Code. 
LSB, 30 September 2015

Consumer Rights Act 2015: two Statutory Instruments

Two Statutory Instruments relating to enforcement under the Consumer Rights Act 2015 have been published:

  • The Consumer Rights Act 2015 (Consequential Amendments) Order 2015 (SI 2015/1726) - in force 1 October 2015
  • The Enterprise Act 2002 (Part 8 Domestic Infringements) Order 2015 (SI 2015/1727) – in force 1 October 2015

Legislation.gov.uk, 29 September 2015

UK mortgage lending shows largest increase since 2008

Data from the Bank of England has found that both overall lending and mortgage lending recorded the biggest net increase since May 2008.

Reuters, 29 September 2015

BoE stress tests to be published 1 December 2015

The Bank of England has set out the timetable for the publication of the UK stress test results and has announced they will be published alongside the Financial Stability Report at 07:00 hrs (GMT) on 1 December 2015. 

Bank of England, 28 September 2015

EU

EBA opinion on mortgage lending value

The European Banking Authority (EBA) has published an opinion on the mortgage lending value (MLV) which refers to a prudent and long-term value of immovable property in the Capital Requirements Regulation. According to the EBA, the MLV should not be used for the valuation of immovable property collateralising covered bonds, nor to covered bonds in general. Rather, its scope should be limited to credit risk, the credit risk mitigation framework and the large exposure regime.

EBA, 5 October 2015