19 October 2015
At the Finance & Leasing Association’s (FLA’s) latest conference to discuss the Financial Conduct Authority’s (FCA’s) new consumer credit regulatory regime, FLA members were once again polled on their experience of dealing with the FCA and its new regulatory requirements.
The majority of delegates (62%) felt their companies were well-prepared for FCA regulation, compared with 30% when the same question was asked in October 2014, and 43% when it was repeated in March of this year.
When asked what had been the most challenging aspect of preparing for, or going through, FCA authorisation, 70% said it was knowing what information the FCA required of them.
Commenting, Fiona Hoyle, Head of Consumer Finance at the FLA, said:
“Firms are much better prepared for FCA regulation than they were a year ago. This is a great achievement, considering the break-neck speed at which the regime was implemented.
“But the industry – and in particular the intermediary market – needs more certainty about the information the FCA expects to see in authorisation applications. We have asked the FCA to consider ways of making their requirements clearer, so as to avoid unnecessary delays for firms applying for authorisation.”
Notes to editors
The FLA’s consumer credit conference was held on 15 October. Delegates were asked a number of questions throughout the day. Their responses are shown below:
How prepared is your firm for FCA regulation?
- Well prepared 62% (34% October 2014) (43% March 2015)
- More work required 38% (68% October 2014) (1% March 2015)
- Not well prepared 1% (1% October 2014) (3% March 2015)
Do you think the FCA has a good understanding of the credit industry and your sector in particular?
- Yes 8%
- Yes, but more detailed knowledge required 66%
- No 26%
What has been the most challenging aspect of preparing for or going through authorisation?
- Knowing what information is required 70%
- Getting queries answered by the FCA 15%
- Delays in a case officer being appointed 15%
Has the overall cost of FCA regulation so far been higher than you initially budgeted for?
- Yes 68%
- No 32%
Where do you think lenders could most improve their consumer communications with help from the FCA?
- Terms and Conditions 21%
- Product information 20%
- Prescribed CCA documentation 33%
- Information provided via brokers 27%
What is the biggest challenge for the future of the consumer credit market?
- The regulatory regime not keeping up with market developments 23%
- Regulation creating a smaller market – less competition and market innovation 25%
- Uncertainty over the extent of further regulatory change and cost 53%
How many consumer credit firms do you think will be left in the market by March 2017?
- 40, 000 to 50,000 31%
- 30,000 to 40,000 34%
- 20,000 to 30,000 35%
In 2014, FLA members provided £100 billion of new finance to UK businesses and households. £74 billion of this was in the form of consumer credit, over a third of total new consumer credit written in the UK last year. £26 billion of finance was provided to businesses and the public sector. FLA members financed more than 27% of UK investment in machinery, equipment and purchased software last year.