BANKING

FCA feedback statement on high-cost credit market

The FCA has published a feedback statement on the high-cost credit market, together with a technical annex, a report which sets out the FCA's survey findings of consumers' experiences of high-cost short-term credit (HCSTC) products and a technical report which summarises the methodological approach used for the price cap research. The feedback statement follows a call for input published in November 2016 and covers a number of topics including: the HCSTC price cap; High-cost credit product findings; and future developments such as overdrafts, RTO, catalogue credit and home collected credit. The FCA has identified a number of issues that could cause consumer harm which it will investigate further with the aim of issuing a consultation paper on proposed solutions in spring 2018.

FCA, 31 July 2017

FCA consults on assessing creditworthiness in consumer credit

The FCA has published a consultation paper on assessing creditworthiness in consumer credit, together with a summary of its research findings, which mainly involved a firm survey and earlier FCA qualitative research. The FCA is concerned about the risk of potential harm to consumers from poor culture and practice by consumer credit firms, which could lead to consumers being granted credit that they cannot afford to repay, causing financial distress. Therefore, the FCA is seeking to clarify:

  • the distinction between affordability and credit risk
  • the factors that should be used when deciding the proportionality of assessments
  • the role of income and expenditure information
  • its expectations around firms’ policies and procedures

FCA, 31 July 2017

ECON report on CRR IFRS 9 Regulation

The European Parliament's Committee on Economic and Monetary Affairs (ECON) has published a draft report on the proposed Regulation amending the Capital Requirements Regulation (CRR) as regards the transitional period for mitigating the impact on own funds of the introduction of International Financial Reporting Standard 9 (IFRS 9) and the large exposures treatment of certain public sector exposures denominated in non-domestic currencies of member states. The draft report contains a European Parliament legislative resolution on CRR, the text of which sets out suggested amendments to the proposed CRR II Regulation that reflect the splitting out of the transitional provisions into a separate Regulation.

ECON, 14 July 2017

FCA update on work on motor finance

The FCA has published a press release providing an update on its work on the motor finance market. Many credit products are now available and consumers’ use of motor finance has grown rapidly in recent years. The FCA announced it would look at this market in its 2017-18 Business Plan in order to develop its understanding of these products and how they are sold in order to assess whether the products caused harm to consumers and whether the market is functioning as well as it could.

FCA, 31 July 2017

INVESTMENTS AND FUNDS

ECB recast guideline and amending decision on TARGET2 published in OJ: July 2017

The below guideline and amending decision relating to Target2 have been published in the Official Journal of the EU (OJ):

  • Guideline (EU) 2017/1404 of the European Central Bank (ECB) of 23 June 2017 amending Guideline ECB/2012/13 on a trans-European automated real-time gross settlement express transfer system (TARGET2) (ECB/2017/19). The Guideline reflects the establishment of a Market Infrastructure Board, a Market Infrastructure and Payments Committee and an Advisory Group on Market Infrastructures for Securities and Collateral. The guideline takes effect on the day of its notification to the national central banks of member states whose currency is the Euro.
  • Decision (EU) 2017/1403 of the ECB of 23 June 2017 amending Decision ECB/2012/6 concerning the terms and conditions of TARGET2-ECB (ECB/2017/20). The amended decision reflects the establishment of a Market Infrastructure Board; it entered into force 23 June 2017.

OJ, 31 July 2017