Features | 21/07/21

Right now, Treasury officials are working on the Future Regulatory Framework (FRF) review. The FRF is considering how the regulatory framework for financial services needs to adapt to be fit for purpose in the future. CCTA submitted a response to a consultation on the review that recently closed. Given member struggles with the interpretation of rules between the FCA and the FOS, we thought it odd that the Financial Ombudsman Service (FOS) was not included in the review. We called for this to be reconsidered in our submission.

We continue to raise our concerns about the FOS and Claims Management Companies with the Treasury and officials in our regular meetings.

Arguably one of the most influential select committees in the House of Commons, the Treasury Select Committee (TSC), is tasked with holding the government’s Treasury department to account. It also examines the administration and expenditure of public bodies like the FCA and the FOS. Membership of select committees reflects the current makeup of the House of Commons. The TSC is chaired by Conservative MP Mel Stride.

The committee can also start inquiries of its choosing. These often involve an invitation for written submissions, along with oral evidence sessions with various organisations. In the past they have looked at personal finances and access to financial services. We regularly try to engage with members of the committee and met (virtually) with a few of them last year to brief them on the sector.

The Treasury Select Committee currently has an open inquiry into the work of the FOS. This has included committee hearings and correspondence between the outgoing Chief Executive and committee Chair. The committee was due to hear from the FOS management once the organisation has published this year’s budget, but it is unclear if this will go ahead, at the time of writing, due to Caroline Wayman’s departure.

The committee has been one of the strongest critics of the FOS in recent months so we will continue to engage with them on the management of the FOS and the role of the new Chief Executive.

All-Party Parliamentary groups (APPGs) are cross party groups formed around a specific topic or interest. Though APPGs have no formal powers, they bring issues onto the parliamentary agenda and can be a good way to educate and build relationships. Representatives of the House of Commons and Lords sit on the various groups. There are APPGs on alternative lending, credit unions and financial education for young people. Unsurprisingly, the group on alternative lending is the one we are most aligned to. Recently the group produced a report on Lending and borrowing post-covid. The Report covered a wide range of issues including the future viability of credit files and the likely increase in illegal lending because of the pandemic.

Outside of the various committees and groups in Parliament, from time-to-time other parliamentarians will become interested in our sector. This could have been as the result of a campaign or a constituency issue. If there is an opportunity to brief an interested MP or member of the House of Lords, then we take advantage of this. Cabinet reshuffles and new parliamentary sessions always see changes to ministerial positions and committee membership. You never know where an interested MP might end up.

Aside from the association’s priority issues, our campaign around access to responsible credit forms a major part of the work we do with these stakeholders. This has been a central focus for CCTA in recent years and will continue.

The campaign is about explaining the role alternative lenders play in helping people access better credit and the contribution that our sector makes to the UK economy (which has come into sharper focus as we start to think about the economic recovery needed following the impact of the Covid-19 pandemic).

The other part of this campaign is about explaining the consequences of not having access to credit. Recently we have been talking about the growth of informal and illegal lending. Particularly, the fact that illegal lending continues to move online, allowing these sites to look more and more sophisticated.

You may have seen the BBC piece that we were quoted in recently, which formed part of the campaign. The story pointed out the risks of illegal lenders, backed up by figures showing a massive drop in investigations and prosecutions for illegal lending during 2020. The purpose of the story was to highlight that illegal lending remains a serious problem, which has been further compounded by the impact of the Covid-19 pandemic. We are working on developing future stories like these that form part of our campaign.

It is vital that we continue our engagement with these groups as they impact upon our members’ ability to operate successfully. Many of you will know that there is little sympathy for alternative credit in wider society, which makes engagement harder as we work to challenge perceptions. But we must keep explaining our current position to that people and organisations that matter, along with the threats we continue to face.

We need to ensure that we are part of the debate. Our messages must be tailored to the interests of these different groups, so we are aligned with their aims, while making sure member views are represented. This is a central part of the work we do to advocate on behalf of members, along with our wider external stakeholder engagement.

Lucy Donovan
Head of Communications