The FCA's Director of Consumer and Retail Policy has recently provided its view on where changes are required in the Consumer Credit market.
Consumer credit remains a key priority for the FCA and we focus on a few takeaways identified from the speech.
The FCA has advised:
It has concerns that consumer needs, particularly those in vulnerable circumstances require added protection
It is proposing a new Consumer Duty to set the standards for firms in all retail markets including consumer credit
It is scoping out the required items for regulation of buy-now-pay-later products with the consideration it carries risks and the potential for harm on consumers;
It will enhance focus on support for borrowers in financial difficulty and people who use high-cost credit products
What it means for you
The FCA will be focused on consumer outcomes and looking to become a more innovative, assertive and adaptive regulator.
As a regulated or close to the regulated firm, you will need to review your overall controls from onboarding consumers to dealing with consumers throughout their lifecycle. A few immediate steps to take care to ensure that credit is not being offered to people who cannot afford to repay it and when faced with vulnerable consumers you have appropriate safeguards and controls in place.
Reach out to MEMA for more information on how we can support you in addressing your control framework and ensure policies are aligned to consumer needs.