HORIZON SCANNING
THE LATEST REGULATORY ISSUES AFFECTING OUR INDUSTRY

CCTA

The industry has become increasingly busy with a range of regulatory issues, which I will touch upon later in this article. To begin with though, I would should start by thanking our members for their continued support.

MEMBERSHIP RENEWALS

Many firms renew their CCTA membership in January. Indeed, about 35% of our fees are due at the start of the year. So, I was delighted when our renewal rate hit 98%. It has been difficult for smaller lenders, and we have seen more leave than join the market in specific sectors. That makes our retention rate even more of a success.

CCTA ACADEMY

I am delighted to inform readers that our online learning and development platform, CCTA Academy, has been well-received since it’s launch at the end of last year.

The FCA has clarified the importance of your team members having a certain level of understanding. CCTA Academy includes those introductory modules and provides that basic information via a range of courses.

We are heading towards 300 enrolments across a range of member firms. Keep an eye on our member communications for more learning and development opportunities from the CCTA

ACCESS TO CREDIT CAMPAIGN

Let’s move back to policy and campaigns. Anyone who has heard me talk about the CCTA knows that we have a history linked with access to credit. Lenders and retailers came together over a hundred years ago because the banks didn’t provide credit to these communities.

Increasingly, I am discussing the need for credit and what we have seen in the reduced supply for specific communities. You may have seen the Clear Score report on the non-prime market. This comes on the back of research from Fair4All Finance and more media interest.

Anyone who has heard me talk about the CCTA knows that we have a history linked with access to credit.

The CCTA team is looking at how to keep the discussion going and float ideas. We are always open to advice and ideas about how the regulator can help.

CONSUMER DUTY

On to the Consumer Duty. The Duty continues to be the issue in just about every discussion. There is a reason why the panel sessions at our events have been about the Consumer Duty for the last couple of years. Increasingly, we hear informal comments from the FCA about their concern that firms are still not doing enough about the Duty.

While we have had some contact from firms seeking help with the Duty, it is less than we expected. That is partly why we are working on two guidance documents. The first will cover implementation and expectations shared by the FCA. The second will look at the requirements around the anniversary of implementation, such as the board report and closed book review. Look out for these via our member emails.

CAR  FINANCE COMMISSIONS

Many of you will have seen the attention that Martin Lewis has brought to the issue of car finance commissions. We are already at a point where over a million people have asked for more information about their commission arrangement.

A big part of this issue is now underway behind closed doors. The FCA has paused decisions on the discretionary issue while a review is taking place, using its Section 166 powers. This should come to a close in the autumn, but it might go on further.

Why is this important to every consumer credit lender? We have said this before; In a Consumer Duty world, transparency is a critical principle. The FCA expect customers to understand where their money is going, who is getting paid what, and why.

POTENTIAL CHANGES TO FOS CHARGES

Another area that doesn’t affect everyone is a potential change at the Financial Ombudsman Service (FOS). I have learned that even if you believe this is not an issue of interest, stick around because it soon might be. How Claims Management Companies (CMCs)carry out fishing exercises means that things can change quickly.

We have also heard that credit cards are under scrutiny. If you have read some of my weekly updates (from our CCTA Update emails), you will have heard that the numbers are increasing quickly. Welcome to affordability.

And, of course, it was not long ago that car finance providers had limited interaction with FOS. One of the critical problems has always been the fundamental unfairness. Lenders will always pay for the cost of a case – win or lose.

The real problem is that this creates a system that rewards quantity over quality. There is nothing to be lost in submitting a claim. For customers, this focus on volumes means your expectations can be raised and dashed if you have a poor claim. If you have a good claim, you are just in with others. You are one of many, and you will not get the support you deserve.

The FOS is now thinking about how it might charge CMCs a fee. From a practical perspective, any fee will make CMCs rightly pause and think about a poor claim. Over thirty CCTA firms got involved in the first consultation and supported change. We think that another consultation is on the way, possibly in early April. I hope that CCTA firms will want to get involved again when that happens.

IN CONCLUSION

We will keep members updated on all of these issues via the usual channels. If you’d like to get in touch with us to discuss anything in particular, please do so.