Author: Russell J Kelsall

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Bill reforming the Consumer Credit Act 1974 has its first reading in the House of Lords

On 19 May 2025, Parliament’s website was updated to confirm that the House of Lords had its first reading of the Financial Services and Markets Bill (which is the Bill setting out the proposed reforms to the Consumer Credit Act 1974 (the CCA)). For those wanting to see the detail, the Bill has also been published.

Section 1 of the Bill sets out the key consumer credit changes (and the Bill covers many other financial services topics; more on those at some later point). Section 1(1) and Part 1 of Schedule 1 set out amendments to the CCA (for a summary of those, see our blog post from earlier this week). Section 1(2) and Part 2 of Schedule 1 set out “minor and consequential amendments to other legislation“.

We are currently waiting for a date for the second reading in the House of Lords.

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HM Treasury publishes policy statement on reform of the Consumer Credit Act 1974

Earlier today, on 18 May 2026 and in a rather unexpected development, HM Treasury (Treasury) published a press release and policy statement on reforming the Consumer Credit Act 1974 (the CCA) rather than publishing its proposed ‘Phase 2’ consultation paper. The Financial Conduct Authority (the FCA) also published a response to Treasury’s policy statement.

The devil is, of course, always in the detail but the headlines are:

– Treasury proposes to (a) repeal the majority of the pre and post-contract information requirements and recast them into FCA rules (by, presumably, adding provisions to CONC), (b) repeal the sanctions (being unenforceability without a Court order, unenforceability under the lender or owner fixes the position and disentitlement of interest and default fees for periods of non-compliance) and (c) keep criminal offences in the CCA.

– Treasury proposes to repeal and re-cast (where relevant and subject to consultation) a number of provisions in FCA rules (but will keep some things in legislation). These include (a) withdrawal and cancellation, (b) termination rights (including voluntary termination rights under Sections 99 and 100), (c) early settlement and rebates, (d) agreements to enter into future agreements being void, (e) securities and sureties, (f) interest not to be increased on default and (g) credit tokens and liability.

– Treasury proposes to keep a number of provisions. These include (a) CCA framework and definitions (including consumer credit agreements, the meaning of credit, running-account and fixed-sum credit, restricted and unrestricted use credit, debtor-creditor-supplier agreements, debtor-creditor agreements and consumer hire), (b) withdrawal of a prospective agreement under Section 57 of the CCA, (c) pawnbroking, (d) negotiable instruments, (e) time orders, (f) protected goods, (g) death of the debtor or hirer, (h) the provisions on credit reference agencies in Sections 157 to 160 of the CCA and (i) other provisions (being Sections 70 to 73, 93A, 102, 104, 126 and most of remaining provisions in Parts 9 to 12 of the CCA).

– Treasury will not be moving forward with a Phase 2 consultation. But it will consult in the future on other issues including ‘complex CCA provisions’ (being Sections 56, 75, 75A and 140A to 140C of the CCA);

– Treasury will be bringing forward legislation as part of the Financial Services and Markets Bill as announced in the King’s Speech on 13 March 2026 to enact its plans (see later).

– There will be transitional provisions to deal with the transfer from the old to the new.

The FCA says it intends to “consult on the key elements of the consumer credit framework previously set out in legislation, where we have the powers to do so, considering the whole consumer credit process” and its approach will be “underpinned by the Consumer Duty” (which is not, of course, a surprise). But Treasury was keen to make the point in its policy statement that the “Government does not expect that CCA provisions which are repealed and recast into FCA rules to be replicated exactly. Indeed, that is not the objective. Instead, the FCA will consider what appropriate requirements should be put in place, considering its statutory objectives, powers under FSMA and its existing rules including principles like the Consumer Duty“.

So we’ll all now need to wait with bated breath for both (a) the draft legislation and (b) the FCA’s consultation paper. But the timetable looks a lot shorter than perhaps everyone had expected.

If you have any questions, please contact your usual contact at Walker Morris LLP:

– Russell Kelsall | Partner & Head of Consumer & Motor Finance | M: 07811 805 702 | E: russell.kelsall@walkermorris.co.uk

– Jeanette Burgess | Managing Partner | M: 07968 114 901 | E: jeanette.burgess@walkermorris.co.uk

– Leanna Bradshaw | Director | M: 07944 091 982 | E: leanna.bradshaw@walkermorris.co.uk

– Paula Twist | Senior Associate | M: 07796 881 571 | E: paula.twist@walkermorris.co.uk

– Jessica Padget | Senior Associate | M: 07814 695 569 | E: jessica.padget@walkermorris.co.uk

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FCA publishes motor finance consumer redress schemes

On 30 March 2026, at around 4:45pm, the UK Financial Conduct Authority (the FCA) published a press release, updated its webpage and published Policy Statement 26/3: Motor Finance Consumer Redress Scheme (PS26/3) (covering 584 pages).

But that was not all. The FCA also published (in addition to PS26/3):

– Technical Annex 1 (covering 181 pages);

– Technical Annex 2 (covering 45 pages);

– consumer research survey (covering 46 pages) and a technical report analysing the awareness of the relationship between vehicle dealerships and motor finance companies (covering 41 pages);

– an updated diagnostic report (covering 101 pages);

– motor finance redress scheme firm-led communications (covering 42 pages) and a supporting annex (covering 89 pages);

– two factsheets: one for customers invited to join the scheme and another for customers who have complained (each being 2 pages);

– analyst briefing slides (covering 25 slides); and

– a transcript of the analyst briefing call (covering 20 pages).

To try and avoid the need to read 1,178 pages, we’ve prepared a handy one-page summary of the key features of the consumer redress schemes (if you click the imagine you should get a bigger version). But the devil is, of course, always in the detail.

If you have any questions, please contact me, Jeanette, Leanna, or Paula, or any of your other usual Walker Morris contacts.

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FCA publishes press release on proposed motor finance consumer redress scheme

Earlier today, on 4 March 2026, the UK Financial Conduct Authority published a press release on its proposals to introduce a motor finance consumer redress scheme.

Some key messages are:

– The FCA says that “if we proceed with a scheme, we are likely to make several changes“.

– If a scheme is made, the FCA expects “to publish final rules in late March” and the timing “will be outside market hours and we’ll confirm the date in advance“.  

– The FCA has not yet made any final decisions on any scheme.

– But the FCA proposes to “streamline the consumer journey to make it smoother for firms to operate“. These changes will include:

(a) removing the need to ask customers who have already complained if they want to opt out: instead consumers will be told within 3 months of the end of the implementation period if they’re owed compensation and how much.

(b) consumers receiving redress offers will be able to accept it straight-away; and

(c) firms will not need to communicate by recorded delivery: instead a range of channels will be acceptable to best meet a consumer’s needs while preventing fraud.

– The FCA is likely to introduce “an implementation period of 3 months, with up to 5 months for older agreements“.

– The FCA reminds consumers that there “is no need to use a claims management company (CMC) or law firm“.

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HM Treasury publishes consultation on proposed changes to the legislative regime for appointed representatives

Earlier today, on 12 February 2026, HM Treasury published a press release and a consultation paper on proposed changes to the legislative regime for appointed representatives.

This consultation follows the Government’s press release and policy statement, published on 11 August 2025, setting out its intention to “shore up confidence in the use of Appointed Representatives and to safeguard the future of the UK’s Appointed Representatives regime“.

The key proposals are:

– to require firms wishing to use appointed representatives to first obtain permission from the Financial Conduct Authority (which aims to ensure the principle is suitable to be authorised);

– to provide “appropriate consumer protection when things go wrong” by allowing a complainant to take a complaint to the Financial Ombudsman Service where the authorised firm is not responsible for the issue (for example, where an appointed representative acts outside of the scope of what the principal accepts responsibility for); and

– to bring appointed representatives within the scope of the Senior Managers and Certification Regime so that it is better aligned with the framework applying to authorised firms.

The consultation closes on 9 April 2026.

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FCA publishes mortgage rule review webpage

Earlier today, on 2 October 2025, the UK Financial Conduct Authority (the FCA) published a mortgage rule review webpage bringing together a summary of the FCA’s work on its mortgage rule review.

The webpage’s aim is to set out the FCA’s changes and communications and what they mean for firms.

So far, the FCA lists five important developments. These are:

– the flexibility in the FCA’s existing stress test rule in MCOB 11.6.18R (and more can be found by visiting another webpage published by the FCA);

– the FCA’s Discussion Paper on the future of the UK mortgage market (the FCA has published a webpage and the Discussion Paper; the consultation period ended on 19 September 2025);

– the changes made to MCOB to support greater choice in the mortgage market (for more, see our summary of the changes);

– the developments to the loan-to-income flow limits; and

– the FCA’s speech on mortgage reform to the Building Societies Association from May 2025.

It’s expected that this will continue to be updated in the coming weeks, months and years.

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Financial Conduct Authority publishes its consumer duty priorities for 2025 to 2026

On 30 September 2025, the UK Financial Conduct Authority (the FCA) published a webpage setting out its consumer duty focus areas for 2025 to 2026.

The FCA is clear that it is moving from the implementation phase, to the impact phase. So it’ll focus on four main areas:

(a) Embedding the duty and raising standards

No more just walking the way, you now need to show that you can talk the talk too. Be prepared to share board reports, complaints data and how you treat vulnerable customers, or customers who are struggling. We’re expecting more good and bad practice examples to help firms know what good looks like.

There are four ‘cross-cutting projects’:

– reviewing products and services outcome: How firms are designing products and services to meet customer needs, including those with characteristics of vulnerability.

– reviewing firms’ approaches to outcomes monitoring: Looking at how firms are responding to outcome monitoring requirements.

– reviewing firms’ customer journey design: Looking at the design and delivery of firms’ customer journeys to ensure customers’ needs are met, with a particular focus on how firms apply friction throughout the journey.

– reviewing the consumer understanding outcome: Looking at how firms’ communications are helping consumers make informed decisions.

(b) Looking at price and value

Fair value has always been a key agenda item for the FCA even before the introduction of the consumer duty. The FCA will be publishing findings on (a) unit-linked pensions and long-term savings and (b) pure protection insurance later this year (having recently published its market study into premium finance).

(c) Sector specific deep dives

The FCA has planned work to tackle “areas of existing concern in sectors where there may be harm, or the potential for harm“. These include:

– fair value in SME business current accounts: the FCA is looking at how small business banking firms’ current accounts are complying with the price and value, and consumer understanding outcomes. Expect feedback to firms by the end of 2025.

– consumer understanding in the credit card market: the FCA is looking at how consumers understand the terms and conditions of credit card products and if they get enough clear information to support decision making, particularly when looking to take out a promotional offer.

(d) Simplyfing the Handbook

The FCA is exploring how the duty can help with streamlining existing rules and guidance. Why? To achieve less complexity, more innovation and better outcomes. But with high level principles comes uncertainty: a challenging balance for many firms.

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FCA and House of Lords Financial Services Regulation Committee’s letters on a proposed motor finance redress scheme published

It’s always interesting to see the exchanges between the UK Financial Conduct Authority (the FCA) and the House of Lords Financial Services Regulation Committee (the Committee). They usually provide useful insights into the thinking of both the FCA and the Committee.

The letters which have been exchanged following the UK Supreme Court’s decision in Hopcraft & Hopcraft v Close Brothers Limited; Wrench v FirstRand Bank Limited (London Branch) t/a MotoNovo Finance; Johnson v FirstRand Bank Limited (London Branch) t/a MotoNovo Finance [2025] UKSC 33 are very interesting. Here are the links:

– FCA’s letter dated 4 August 2025; and

– Committee’s letter dated 8 August 2025.