FCA publishes information on consumer credit misconceptions

The Financial Conduct Authority has published two guides in question and answer format which seek to address common misconceptions by firms around credit worthiness and affordability and over consumer credit permissions. They are intended to explain key matters necessary for compliance with the FCA's rules and some of the text may be incorporated into the Perimeter Guidance manual in future.

Financial Conduct Authority, 26 June 2015

FCA Thematic Review (TR15/8): Quality of debt management advice

The Financial Conduct Authority has published a thematic review (TR15/8) on the quality of debt management advice, finding that standards fall short of what they expect and that the sector remains one of the highest risk consumer credit sectors.  Amongst the Regulator's concerns are a failure to make customers sufficiently aware of the nature of the services being offered and the fees being charged. Other matters relate to inadequate protection of client money and/or a failure to pass this money on to creditors promptly.  In this respect, the FCA will scrutinise applications for authorisation by debt management firms, particularly in these respects, to see that they satisfy the Threshold Conditions. It also welcomes the recommendations on debt advice made in the Review of the Money Advice Service led by Christine Farnish, where the Government has accepted the need to review the legal framework for debt administration.

Financial Conduct Authority,  25 June 2015

FCA smarter consumer communications discussion paper

The Financial Conduct Authority has published a discussion paper on smarter consumer communications (DP15/5) and is encouraging firms and stakeholders to work together in order to deliver information to consumers in more effective ways.  It explains that the FCA wishes to start a debate and identifies a number of areas which could benefit from a new approach. These include firm's terms and conditions which are said to be too legalistic and lengthy. The Regulator will also look at its own rules and requirements in a handbook review and where permitted by EU legislation will seek to remove unnecessary provisions. In doing so it will consider the extent to which disclosure requirements have actually helped customers make informed decisions about their money.  In a speech on the same day as the DP was published, Christopher Woolard, FCA Director of Strategy & Competition,  spoke about the work the FCA is doing to put customers at the centre of the business.

Financial Conduct Authority, 25 June 2015

FCA/PRA consultation on the Legacy Credit Unions Sourcebook

The Financial Conduct Authority and the Prudential Regulation Authority have published a joint consultation paper (FCA CP15/21, PRA CP22/15) on reform of the Legacy Credit Unions Sourcebook (CREDs). This arises from the transfer of the FSA’s powers to the PRA and FCA on 1 April 2013 when each of the new regulators adopted their own version of CREDS by designating provisions as "PRA only," "FCA only’" or "shared." The PRA now intends to delete and replace CREDS with a new Credit Unions Rulebook while the FCA will retain those parts of CREDS that relate to its statutory responsibilities. The closing date for comments is 30 September 2015.

Financial Conduct Authority/Prudential Regulation Authority, 24 June 2015

FCA factsheet on authorisation for credit unions

The Financial Conduct Authority has published a factsheet (036) on the "mobilisation" process approach to the authorisation of credit unions. This explains how the FCA has simplified the authorisation process by extending the mobilisation option that was previously available only to new banks. Under the mobilisation process, authorisation is granted but a restriction is placed on certain activities pending further work by the applicant to satisfy the Regulators.

Financial Conduct Authority, 24 June 2015


Consultation on telemarketing by consumer credit firms

In response to a Parliamentary Question, the Government has confirmed that the Financial Conduct Authority will consult this summer on unsolicited marketing calls, emails and text messages from consumer credit firms. This will include consideration over whether to prohibit such communications.

Hansard, Written Question – HL513, 29 June 2015

Atom gets regulatory approval

Atom Bank has been given regulatory approval, making it the first digital-only lender planning to capitalise on the move by consumers to mobile banking.

Financial Times, 24 June 2015

May 2015 figures for high street banks

The British Bankers' Association has published  May 2015 figures for high street banks. It reports that household borrowing remains robust  and that mortgage approvals have increased for the month.

British Bankers' Association, 24 June 2015