FCA regulation round-up reminds of how its rules apply to HCSTC

Industry News | 16/01/20

In its January 2020 regulation round-up, the Financial Conduct Authority (FCA) noted that there has been some debate in the high cost, short-term credit (HCSTC) market about how the FCA’s creditworthiness rules apply to repeat lending. The FCA notes that, while its rules do not prevent firms from issuing more than a particular number of loans to a customer, firms must comply with creditworthiness rules in doing so, including assessing the affordability risk to the borrower. It refers to the FCA Dear CEO letter of October 2018, which highlights the risks to the consumer posed by repeat HCSTC borrowing, and that rigorous affordability assessments are key in avoiding harm in this area.