Lending standards, vulnerability and 3 lines of defence
The fair treatment of vulnerable consumers has been high on the FCA agenda for several years as these consumers are at greater risk of financial harm. Recent FCA guidance has been followed by the Lending Standards Board [LSB] releasing the results of a thematic review, considering whether vulnerable customers were receiving fair outcomes at key […]
Complaints – root cause analysis
You cannot open a consumer supplement of any newspaper today without seeing predictions of the next ‘mis-selling scandal.’ Since the PPI tsunami receded, commentators have suggested numerous products that the Claims Management Company [CMC] industry may target next. The current focus is on the car finance industry and particularly, the financing of car loans. It’s […]
Later life lending – compliance challenges
The Equity Release Council [ERC] recently launched an independent report titled ‘Later Life Lending: Great Expectations’. Constructively, the report recognises the historic problems of equity release, acknowledging that products such as shared appreciation mortgages and investment backed home income plans “continue to cast a long shadow over the market today”. However, despite the statutory regulation […]
Consumer duty – “it’s not going away”
We know this is on everyone’s agenda and by now firms in sixteen separate financial services sectors will have received tailored FCA guidance. As the July deadline looms ever closer the FCA chief executive, while addressing a Treasury Select Committee, warned that Consumer Duty “will not go away”. At the same time, the regulator has […]
FCA/Amigo Loans penalty is a warning to all
The FCA decision to impose a financial penalty of £72.9m, “were it not for Amigo’s financial position” and “the risk to the planned customer redress scheme” should be a stark warning to all lenders. We hear some lenders say “We don’t operate in that market”, but that’s not the point. The FCA has always made […]
FCA Consumer Duty focus ramps up
The FCA has issued eight of the sixteen sector-by-sector guidance letters for Consumer Duty. The other eight sectors will receive theirs shortly. We have active clients in fifteen of the sixteen individual sectors, so we know Consumer Duty is exercising their minds. With an implementation deadline due in July 2023, the FCA is being proactive […]
PRA seeks proactivity in managing credit risk
The PRA is telling firms to prepare for a prolonged period of stress. While the recent FCA focus has been the increasing risk of mortgage defaults and the resultant risk to consumer harm and market stability, the PRA is tackling the issue from a slightly different angle. In a recent Dear CEO letter to Deposit […]
Supporting existing customers
In its parting shot of 2022, the FCA issued a consultation in response to the rising cost of living, outlining draft guidance for firms to support customers in financial difficulty. The urgency of the subject matter was obvious as firms were given less than two weeks to respond. Deteriorating market conditions have been further highlighted […]
Keeping aligned with the regulator
Around this time of year, the FCA usually issues two significant, interlinked, documents. This year is no different as their business plan and perimeter report were both announced at the end of October. As always, they are packed full of nuggets and both reference FCA directional thinking, so there is plenty for risk professionals to […]
Remote working and regulator expectations
Many firms have been remote working for 20 months now. It is a testament to operational resilience plans that so many businesses were able to switch from office-based models to working from home in such a short time. As the world returns to pre-pandemic norms, many firms are grappling with the challenges of hybrid working. […]
