Tracey McDermott, the Acting Chief Executive at the FCA, delivered a speech at the Credit Summit 2016 on consumer credit regulation and the journey so far.
On 1 April 2014, around 50,000 firms transferred with interim permission from the OFT to the FCA. Since then the FCA has determined over 30,000 applications for authorisation including over 8,000 firms which are new to the consumer credit market. The FCA has, amongst other things, completed thematic reviews into the payday lending and high-cost-short-term credit market and has also reported its findings on the quality of debt management advice during this time.
The FCA published its Business Plan 2016/17 last week and the speech explains that a number of the FCA’s priorities highlighted in the plan for the next year are applicable to consumer credit firms. This includes advice, culture and governance, technology and innovation, treatment of existing customers and financial crime.
The speech covers where the industry is now and what effective future regulation looks like for the sector. Consumer Credit lending was reported to be £180 million last year. The speech highlights that while the majority of that sum was lent responsibly, there are still poor practices that tarnish the industry. The FCA is determined to continue to drive up standards and also reminds firms that it wants to hear their views on which of the Consumer Credit Act’s provisions should be reviewed and how best it should engage with firms on this process.
Finally, Ms McDermott explains that the FCA expects firms to promote, embed and enforce the right culture in their business. A core feature of the FCA regime is to promote effective competition in the interests of consumers and so it plans on pushing for a consumer credit market where firms seek to outdo their peers on value and quality.