Developments in the UK

#LEND360 ●
John Gordon, FactorTrust
Jeannette Burgess, Walker Morris, LLP
Marcus Vernon, Realex Payments
#LEND360 ●
UK Regulatory Overview
• Financial Conduct Authority took responsibility (from Office
of Fair Trading) for Consumer Credit from 1st April 2014.
– They have stronger powers and more resources available
• Lenders must adhere to the FCA’s rules relating to conduct
of business. Published in Feb 14, they cover general
business management, systems and controls, treating
customers fairly, specifically
– Affordability assessments, limits on rollovers, limits on use of
Continuous Payment Authority (CPA) to take payment and risk
warnings displayed prominently by lenders
– FCA is also looking back at previous lender activities / processes
UK Regulatory Overview
• Consultation Paper 14/10
– Statutory duty to impose a price cap (proposed £24 per £100 over 30 days,
never pay back more than double the principal).
– Data Sharing - Expect lenders to be reporting in ‘real-time’ to 2 CRAs by
Nov 14, already gathered information on lender activity from CRAs.
• UK Competition Commission (now Competition and Markets
Authority) asked to look into the market and lenders. Increased
scope to include lead generators.
– They state that there is an adverse effect on competition and proposed
remedies including price comparison sites, increased transparency on costs
& charges and the role of lead gens.
• Application authorization periods starts Dec. 1, 2014
Panel Questions
Q: Do you expect any additional regulatory changes
by the FCA from their consultation period, or is it
expected to be what they initially communicated?
Panel Questions
Q: What are the some of the important dates and
activities that lenders need to be aware of going
Panel Questions
Q: What has the impact so far from the FCA guidance
to the HCSTC (high cost short term credit) industry in
the UK?
Panel Questions
Q: Do you see new lending products being developed
or will existing one month (payday) products survive?
Panel Questions
Q: What’s the real-time credit reporting guidance for
HCSTC lenders the FCA announced from their recent
consultation communication?
Panel Questions
Q: What are HCSTC lenders doing to address realtime credit reporting and when does this need to be
Panel Questions
Q: Do you think real-time reporting will become
compulsory for HCSTC and potentially other lending
Panel Questions
Q: Once these regulatory changes take effect on
January 2, 2015, do you think regulatory noise in the
HCSTC industry will quiet down a bit?
Panel Questions
Q: How have all the regulatory changes impacted the
profitability of existing UK lenders?
Panel Questions
Q: How does the panel anticipate the investigation by
the CMA will affect lead generation?
Panel Questions
Q: What is the wider impact of the recent
announcement that Wonga will be writing off £220m
of customer’s loans as it was not considered that
their affordability assessments had been sufficient?
Panel Questions
Q: In your opinion, what will the future HCSTC
market look like in the UK? What will be the impact
on consumers?
Panel Questions
Q: What are the advantages / disadvantages for new
HCSTC lending entrants into the UK market?

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