View from Brussels - February 2020

Earlier this month, colleagues and I visited Brussels to better understand the lie of the land post-Brexit. The great unknown remains, of course, the nature of the future relationship between the UK and the EU. What we found was the UK’s Brussels-based officials enjoying a new lease of life, no doubt aided by the fact that a big Government majority felt like they have a clearer mandate. They can now draw on the experience of UK missions in other big trading partners, and learn lessons on how other non-EU countries (such as the US and Japan) are able to shape the debate in Brussels.

A key facet of maintaining influence is to link it to the size and importance of particular markets. The UK credit and leasing markets will continue to be the largest in Europe which means that our sector still has a useful contribution to make, particularly around the table of Eurofinas and Leaseurope, our European federations. We can also share with European audiences how our collaborative approach with UK regulators has ensured workable outcomes-based rules and guidance. The reduction in information exchange is one of the areas where the UK’s departure from the EU may be most keenly felt.

In the event of regulatory divergence by the UK, or some form of "outcomes-based equivalence", those on the other side of the Channel may consider that it offers lessons – whether good or bad – for the EU itself, particularly when both sides are aligned until the end of 2020.

It will be interesting to see, for example, how the review of the Consumer Credit Directive (CCD) plays out. The European Commission is due to take a view by Autumn 2020 on whether new rules are necessary. The general consensus across the continent is that the framework needs modernising to reflect the fact that consumers increasingly take out credit online. The UK industry has demonstrated in the past its ability to make changes swiftly via industry codes of practice. Assuming that final agreement on any revised CCD would take effect after Brexit, the UK might be able to be more fleet of foot than the European process.

For now though, the FLA continues to keep a watchful eye on what comes out of Brussels to make sure that in the absence of UK MEPs and Government representatives, that consumer credit and leasing providers are not caught unawares by developments that might impact them.

Published 26 Feb 2020