FCA speech on supporting customers through tough times

Earlier today, on 23 March 2022, Brian Corr, Interim Director of Retail Lending at the UK Financial Conduct Authority, delivered a speech to Credit Summit 2022 on the FCA’s priorities for credit regulation.

The key points from Mr Corr’s speech are:

– Consumers are “facing significant pressure from the rising cost of living” and the credit industry will need to “respond again to these new circumstances – and be ready for future challenges when they come“.

– The FCA’s key focus will be on “the outcomes consumers get from credit markets, underpinned by our more adaptive, more assertive, and more innovative regulatory approach“.

– The FCA needs “credit markets that are innovative, competitive, and focused closely on delivering the right outcomes for the consumers they serve“. Credit “matters greatly for consumers” but “also brings significant potential for harm – so firms needs to be cautious and diligent“.

– Firms should focus “ever more closely on delivering the right outcomes for their customers“.

– The proposed consumer duty is “intended to be flexible to allow us and you to respond to circumstances. That means you don’t need to wait for us to give detailed rules – you can get a head-start now by making sure you have the right mindset, culture and data in place, and looking for gaps between where you are now and where you’ll need to be“.

– Firms need to understand their customers and how they’re affected  by the products and services firms provide. Products must be suitable. Information must be clear and transparent so customers can properly assess what is being sold. Firms need to be responsive.

– The FCA will continue to maintain its focus on helping borrowers in financial difficulties. The FCA is “running a comprehensive programme on how borrowers in financial difficulty are treated so that we can ensure those who need help are getting it“. The FCA expects to issue a full report in “the second half of 2022“.

– There is ongoing work to help people who struggle to access credit.

– The FCA has “seen nothing to indicate that FOS’ approach to assessing affordability complaints, including loans involving relending, is out of line with our expectations. Our own experience is that firms have too often failed to meet our expectations on affordability, including relending. We see no case for lowering these standards – we won’t help consumers one bit by making it easier for firms to lend them money that they can’t pay back“.

FCA’s Andrew Bailey gives speech on the future of financial conduct regulation

On 23 April 2019, the UK Financial Conduct Authority’s chief executive, Andrew Bailey, gave a speech to the ‘Future of Financial Conduct Regulation’ conference in London.

If there is any speech you are going to read, it probably should be this one. It gives a clear insight into the FCA’s thinking and, in particular, the role and use of the FCA’s Principles for Businesses. There seems a clear will within the FCA to re-look at these principles (and potentially increase their scope). As Mr Bailey says, “principles are not debating points, they are the bedrock of our regulation, and there is a good case for enhancing their standing and practical impact”.

For good measure, there is also some focus on Brexit (and its impact on financial services) and the FCA’s consultation on introducing a ‘duty of care’ in financial services.

Speech by Jonathan Davidson on what the consumer credit sector can expect from the FCA

On 21 March 2019, the FCA’s Executive Director of Supervision – Retail and Authorisations, Jonathan Davidson, gave a speech on what the consumer credit sector can expect from the FCA.

There are some key messages including:

– There has been a lot of change in the sector.

– The FCA will continue to focus on affordability, business models and culture.

– Brexit will not change the way the sector is regulated.

– The FCA’s focus in the high-cost sector is on (a) re-lending and (b) affordability (particularly on guarantor lending).

– The Senior Manager & Ceritifcation Regime will help improve culture.

The speech ends by saying: “My top top for today is to keep ahead of the rules, you can invest in expensive tick box compliance or you can get on top of your culture., A healthy purposeful culture will be the best way to deliver value for you, your clients and your business”.