9 April 2015
The Finance & Leasing Association’s (FLA) 18 March conference for members, on the new Financial Conduct Authority (FCA) regulatory regime for credit, captured the mood of the industry with its title, ‘What Does Good Look Like?’
Polled at the event, a large majority (60%) of attendees said that the greatest regulatory challenge facing them was understanding what ‘good’ compliance would look like in specific markets, from the FCA’s perspective.
Delegates were also asked about their experience of preparing for, or going through, authorisation under the new regime. 76% said it was onerous, but 72% had found the FCA either helpful or very helpful in answering their queries. The remaining 28% said the FCA’s service had been unhelpful.
Fiona Hoyle, Head of Consumer Finance at the FLA, said:
“Having been constructed and implemented on such a short timetable, it is not surprising that a regulatory regime of this size and complexity covers many areas where more clarity is still needed.
“The real test for the regulator is how quickly they can sort out the queries, so that the regime can then bed down. We welcome the very collaborative approach the FCA is taking with us to help achieve this.”
Notes to Editors
1. The FLA’s consumer credit regulation conference was held on 18 March. Delegates were asked a number of questions during the day, and their responses are shown below:
How have you found either preparing for, or going through, the FCA authorisation process?
A. Onerous 76%
B. Straightforward 22%
C. Easier than expected 3%
When preparing for the authorisation process, how helpful have you found the FCA in answering your queries?
A. Very helpful 13%
B. Helpful 59%
C. Unhelpful 28%
What is the biggest regulatory challenge for your firm?
A. Understanding what good looks like for example, when checking affordability/credit worthiness 60%
B. Keeping track of whether brokers are correctly authorised 17%
C. Ensuring at all remuneration structures are compliant 17%
D. Managing increased costs 6%
The Government must decide what to do with the remainder of the Consumer Credit Act by 2019. Do you think:
A. This is a great opportunity to remove provisions which are no longer fit for purpose 93%
B. The CCA should remain largely as it is 7%
2. The Finance & Leasing Association is the leading trade body for the asset, consumer and motor finance sectors in the UK, and the largest organisation of its kind in Europe.
3. Our members include banks, subsidiaries of banks and building societies, the finance arms of leading retailers and manufacturing companies, and a range of independent firms.
4. In 2014, our members provided £99.5 billion of new finance. £74.1 billion of this was in the form of consumer credit to support purchases ranging from cars to household goods and £25.4 billion was provided to businesses and the public sector, representing almost 27% of UK investment in machinery, equipment and purchased software in the UK last year.