Legal issues for the UK consumer finance industry
Earlier today, on 28 July 2020, the FCA published a policy statement, PS20/8, banning motor finance discretionary commission models and making minor changes to commission disclosure rules. The FCA also published a press release.
My one page summary is (and you can see a bigger version if you click on it):
If you want a pdf copy, please get in touch: russell.kelsall@TLTsolicitors.com.
Earlier this week, on 20 July 2020, HM Treasury published a policy statement setting out the changes the Government proposes to make on the process for cancelling an authorisation from the UK Financial Conduct Authority.
The Government plans to take forward these measures when Parliamentary time allows.
These changes will only impact firms regulated by the FCA (and not dual regulated firms).
Earlier this week, on 20 July 2020, HM Treasury published a consultation on the regulatory framework for the approval of financial promotions.
HM Treasury says that experience in recent years suggests the regime needs “additional safeguards to ensure that approval by an authorised person is a genuinely effective means of ensuring that consumers are protected from deficient or potentially harmful financial promotions“.
To strengthen the Financial Conduct Authority’s ability to ensure the approval of financial
promotions operates effectively, the Government proposes to establish a regulatory ‘gateway’, which a firm must pass through before it is able to approve the financial promotions of unauthorised firms. Any firm wishing to approve the financial promotions of unauthorised firms would therefore first need to obtain the FCA’s consent.
The deadline for responding is 12pm on 25 October 2020.
It may just be me but one of the things I’ve found interesting are the questions being put to the Government (and their answers) about the response for mortgage and credit customers being impacted by COVID-19.
Earlier today, HM Treasury published three written responses to questions 74750, 74751 and 74752. All of the questions were asked by a Labour MP, Kate Osborne. She asked:
– what recent discussions the Chancellor has had with representatives of the mortgage lending sector on easing the financial pressures faced by people paying “double interest” on their mortgage during covid-19 outbreak and what plans he has to help those people switch to new mortgage lenders;
– what assessment the Chancellor has made of the effect of the modified affordability assessment on the number of mortgage prisoners unable to access new mortgages; and
– what recent discussions the Chancellor has had with representatives of the mortgage lending sector on tackling the situation affecting mortgage prisoners.
All three questions received exactly the same answer:
“The Government remains committed to supporting these borrowers, which is why the Government and the FCA have taken action to remove the regulatory barriers that previously prevented switching.
Lenders are currently making the necessary adjustments and system changes to enable them to use the modified affordability assessment for borrowers looking to re-mortgage. Due to the operational constraints caused by Covid-19 there was a temporary retraction of mortgage products in the market, therefore it would not have been of benefit to contact borrowers when meaningful options were not available to them. We expect lenders to start offering these borrowers switching options by the end of the year.
Earlier this year I wrote to UK Finance outlining my expectation that as many of its members as possible should move quickly to offer new deals to borrowers that are eligible to switch under the new FCA rules. You can read the letter here.
The Government continues to work with the mortgage lending sector to ensure support is available for consumers.
The FCA also recently noted that firms should be reviewing their variable rates to ensure they adhere to regulations regarding the fair treatment of consumers. The full statement can be found here.”
Without wanting to be a pedantic lawyer, these answers do not really respond to the MP’s questions. Perhaps that’s the point. But I think I’ll continue to keep reading these answers as they give a useful insight into the Government’s views, and an insight into the issues being raised by consumers with MPs.
Earlier today, on 15 July 2020, the UK Financial Conduct Authority published updated temporary guidance to motor finance and high-cost credit firms dealing with customers needing COVID-19 related payment deferrals.
There’s updated guidance for motor finance, for high-cost short-term credit and for rent-to-own, buy-now pay-later and pawnbroking agreements. There’s also a short feedback statement.
My one page summary is (and you can see a bigger version if you click on it):
If you want a pdf copy, please get in touch: russell.kelsall@TLTsolicitors.com.
Issue 111 of Butterworths Financial Regulation Service has now been published. I’ve reviewed and revised the introductory chapter on CONC and the chapters on CONC 1 to 4, 5A to 5D and 9. I’ve also written new material including:
– a new chapter on CONC 7 (including looking at the impact of the FCA’s COVID-19 related temporary measures); and
– a new chapter on CONC 11 (dealing with cancellation of certain agreements)
The commentary on Division 4H is now up to date to April 2020.
Earlier today, on 3 July 2020, the UK Financial Conduct Authority issued a consultation on draft updated temporary guidance to motor finance and high-cost credit firms dealing with customers needing COVID-19 related payment deferrals.
There’s draft guidance for motor finance, for high-cost short-term credit and for rent-to-own, buy-now pay-later and pawnbroking agreements. There’s also a draft handbook instrument.
My one page summary is (and you can see a bigger version if you click on it):
If you want a pdf copy, please get in touch: russell.kelsall@TLTsolicitors.com.
Earlier today, on 1 July 2020, the UK Financial Conduct Authority issued its finalised and updated temporary guidance to credit card, overdraft and personal loan consumer credit firms dealing with customers needing COVID-19 related payment holidays.
There’s finalised updated guidance for credit cards (including retail revolving credit), for overdrafts and for personal loans. There’s also a feedback statement and a press release on banks’ overdraft pricing decisions and plans to support consumers.
My one page summary is (and you can see a bigger version if you click on it):
If you want a pdf copy, please get in touch: russell.kelsall@TLTsolicitors.com.
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