Reducing the burden

Published 08 August 2024

The end of July saw the first anniversary of the implementation of the FCA’s Consumer Duty. This meant vast amounts of work undertaken by regulated firms to prepare, looking to embed the Duty in every stage of the customer journey.  We have supported CCTA members through this process, but it is no means finished, as we know this will be a continual process, especially as requirements for closed products and the Annual Board Report have now come into force too. There is no doubt that the introduction of the Duty has meant extra regulatory requirements which come at a cost. These additional costs can particularly hit small firms, and we know there is more to come with the introduction of the new Product Sales Data requirements next year, for example. For this reason, it was good to see the FCA launch a call for input last week, focused on looking to simplify its retail conduct rules and guidance. The regulator is particularly keen to address potential areas of complexity, duplication, confusion, or over-prescription, which create regulatory costs with limited or no consumer benefit. They have also said that they want to include appropriate flexibility in the rules to be responsive to future changes and innovation. The FCA wants to hear from firms on issues including: which detailed rules or guidance could be simplified to rely on high-level rules, or have interactions with other rules which could be clarified the appropriate balance between high-level and more detailed rules the potential benefits and costs from simplifying rules The FCA has said that it has already committed to a post-implementation review of the Consumer Duty, so they are not seeking responses with suggestions for changes to the Duty within this project. The CCTA will be taking part in this process. We are interested in hearing from members if you have any recommendations. Are there particular areas you can identify that need to be clarified or are no longer required? This is your opportunity to raise these points. Staying with reducing the regulatory burden, the FCA has also recently confirmed the creation of an independent Cost Benefit Analysis (CBA) Panel to add to the other statutory panels that work with the regulator. The panel has been tasked with assessing the proportionality of proposed policy changes that the FCA would like to introduce. It will provide advice to the regulator on preparing and improving CBAs. The Panel began reviewing the CBAs of proposed new policies on 1st August. It will review them in advance of publication, allowing the regulators to consider its recommendations. We hope the creation of the Panel will mean that the impact of potential policy changes on firms will be fully considered, especially from the point of view of regulatory burden and cost to firms. It is good to see the regulator taking these steps to consider the future regulatory requirements. The FCA is after all, tasked with delivering competitive markets that work well for consumers. We need to ensure that the correct …

A change in direction?
What a new Labour government could mean for the industry

Published 07 August 2024

GENERAL ELECTION RESULT Labour won the recent General Election with a landslide victory. The party now has a majority in the House of Commons of 170, close to what Tony Blair achieved in 1997. However, they achieved a relatively modest share of the vote for a governing party. This coupled with low voter turnout, may undermine that majority in the coming months and years as they look to introduce their legislative programme. Small parties also did well with the Liberal Democrats achieving their best election result, and both the Greens and Reform picked up a handful of seats for their respective parties. The Conservatives suffered their worst result in history. Rishi Sunak has announced that he will stand down as leader once arrangements for choosing a successor are in place. So, we can expect a full leadership election soon. THE NEW LABOUR GOVERNMENT From a financial services perspective, we have seen little surprise in who has been appointed so far. Rachel Reeves has become the first female Chancellor and Tulip Siddiq MP has been appointed Economic Secretary, with responsibility for financial services regulation. Siddiq has shadowed this brief for the last few years and has commented recently that she intends to “tear down barriers to growth” and has also called on the Conservatives to stop delaying the regulation of the Buy Now Pay Later (BNPL) sector. WHAT DO WE KNOW ABOUT LABOUR PLANS? During the election campaign, Labour managed to say as little as possible, sticking to key pledges made by Keir Starmer. The manifesto also made little mention of the financial services sector, beyond recognising the contribution it makes to the UK economy. It did refer to the cost-of-living crisis and the need to improve financial resilience. The party also released a publication in January called “Financing Growth” which was largely an appeal to businesses which focused on the need to promote growth and competition. Part of this was about distancing the party from a previous anti-business stance. Another possibility for the future is a ‘Fair Banking Act’ that has been introduced in other countries. This included details on creating a national financial inclusion strategy, and there are rumours that the Labour Government may appoint someone (likely to be connected to the Financial Inclusion Commission) to look at this issue in further detail. This document also mentioned plans to regulate the BNPL sector so this might be something we see them move quickly on. Elsewhere we know that the Labour Party has always been supportive of the Credit Union movement so expect this to continue. Another possibility for the future is a ‘Fair Banking Act’ that has been introduced in other countries. A bill of this kind would likely call on high street banks to lend to underserved communities or provide funding to do this. Banks may not be forthcoming, but there is also a role for us here to explain how the alternative lending sector can be part of the solution and help with access to credit. One …

A new day…
A new government, a new fraud strategy

Published 07 August 2024

As the dust settles on an eventful election campaign and newly appointed Ministers find their feet, it’s only right that we should ask what next for fraud policy under the new Labour Government. If the 2010s were something of a ‘lost decade for the counter-fraud community, then the 2020s were the rebounder with the publication of the UK’s first ever Fraud Strategy in 2023. A little over a year later we have a commitment to a second one; the Labour Party’s manifesto promising to introduce “a new expanded fraud strategy to tackle the full range of threats, including online, public sector and serious fraud. We will work with technology platforms to stop their platforms being exploited by fraudsters”. While the cynics may be tempted to say that another strategy will be little more than a paper-based exercise with little impact outside Whitehall, this high-level political commitment is something the counter-fraud community should welcome. First, there are those that would argue that we’ve not actually had a national Fraud Strategy, but a consumer Fraud Strategy, given the lack of focus on fraud against business. The University of Portsmouth’s Annual Fraud Indicator 2023 estimated that around £150bn in fraud is committed against the private sector each year. It is therefore encouraging that the new Government has committed to expanding policy in this area. Second, despite some encouraging initiatives with social media and technology platforms in the Online Fraud Charter, it is still far from clear what these would even deliver in practice. There are encouraging signs that the new Government intends to do more in this space, with commitments to building both carrots and sticks into the relationship with the tech sector. The announcements made by Labour in opposition give hope that the new Government is committed to maintaining the upwards trajectory of fraud as a priority. Third, there is a specific focus on the need to get a grip on the scale of fraud against the public sector. In opposition, Labour committed to introducing an offence of ‘fraud against the public purse’ and to introducing a ‘Covid Corruption Commissioner’ to tackle procurement fraud and sector fraud running to up to £40bn – dialling up investment in this area could reap significant rewards. These are encouraging signs of new pace and ambition for fraud policy in the UK. But beyond these, where are the gaps that the incoming Government needs to fill? A good starting point is the Cifas Fraud Pledges 2024, launched in May of this year. Specifically, there are three things the new Government should do to really shift the dial in the fight against fraud. 1) Give fraud and economic crime the leadership and prominence they need and deserve. The Government could do this by creating a Minister for Economic Crime, reporting directly into the Prime Minister with responsibility for driving change and coherence across the system. With policy responsibility split across numerous government departments, without institutional change the response risks remaining sclerotic. 2) It is essential that the …

Increasing uncertainty
Consumer-led litigation

Published 05 August 2024

THE INCREASE IN CONSUMER-LED LITIGATION The past ten or so years have seen an explosion in consumer-led litigation. For example, the Supreme Court has considered the following: whether there is an unfair relationship where a lender keeps 71.% of a premium paid for a policy of payment protection insurance as a commission: Plevin v Paragon Personal Finance Limited the meaning of concealment, and its impact on limitation, in the context of claims relating to the sale of payment protection insurance: Potter v Canada Square the limitation period for claims under the unfair relationship provisions: Smith & Burrell v Royal Bank of Scotland whether parking charges imposed on a customer for overstaying their allocated time were a penalty or unfair: Beavis v ParkingEye. THERE ARE MORE CASES TO COME And there are more important cases to come later in 2024 and early 2025 including: the pending appeal in the Court of Appeal on what duties (if any) are owed by motor dealers to customers where those dealers receive a commission from the lender for their introduction. the pending judicial review in the High Court on the Financial Ombudsman Service’s decision of a complaint made against a motor finance lender relating to the non-disclosure of commission and the commission arrangements. This involves issues over the application of CONC 4.5.2G and Principle 6 to discretionary commission models. the pending appeal to the High Court on (a) whether the County Court has exclusive jurisdiction to consider claims under the unfair relationship provisions and (b) whether it is permissible for one claim form to be used to bring a claim for a significant number of unconnected claimants seeking remedies under the unfair relationship provisions. THE EFFECT OF SUCH CASES ON REGULATION Firms will always encourage certainty. If the legal position is certain then it allows firms to budget, to plan, to grow and to seek investment. Uncertainty leads to instability. What is often said about the consumer credit regulatory system is that it has three different (and arguably competing) approaches: it has mandatory rules (for example, form and content requirements) with often significant sanctions for getting it wrong it is principle based (see the Principles for Businesses); and it is outcome based (see Consumer Duty). These three different approaches create uncertainty. But the developments from the Court can also introduce additional uncertainty and effectively introduce regulation which was not part of the framework. For example, Plevin effectively said that the lender should have told the customer about commission even though there was no legal requirement to do so. The unfair relationship provisions also provide broad grounds for challenging a relationship: the combined effect of Potter and Smith introduce further uncertainty (but firms can use delay as an argument why the relationship is not unfair, or why no remedy should be awarded). WHAT SHOULD FIRMS DO? The regulatory regime is both complex and uncertain. The increase in consumer-led litigation has simply increased that level of uncertainty and effectively acts as another form of regulation. Firms should …

Consumer Duty – one year on

Published 01 August 2024

It has now been one year since the Consumer Duty came into force for new and existing financial products and services. We are sure that firms will agree; it has been quite a journey so far! The implementation of the Duty has been a somewhat phased approach. The financial services industry had deadlines in relation to approved implementation plans and information exchange requirements. We are now at the stage of the final, hard deadline set for firms under the Duty, that deadline being Annual Board Reports and closed products and services. Over the last year, firms have been living and breathing the Consumer Duty. The 31st July 2024 deadline now requires firms to have produced board-level reporting, covering their focus on good consumer outcomes as well as governance, culture and conduct. The deadline also brings into the scope of the duty, closed products and services. The CCTA has issued guidance to members throughout their implementation journey. For board reports and closed products, we issued our latest guidance paper. Members can access his via the Member Hub. The guidance paper provides useful information and advice around the content of your annual board reports. It covers aspects such as the type of data and information expected in board reports, what level of data would be appropriate, as well as proportionality and the layout and format. We have always said that this is a journey, rather than a destination. Firms should be aware that the final deadline by no means signals the end of your focus on the Consumer Duty. Firms should continue to monitor the outcomes that retail customers receive and work not only to address any harm or detriment but look to improve on those outcomes throughout their business operations. We remind firms to ensure that they have a particular focus on vulnerable customers to ensure that such customers are receiving, at least, as good outcomes as the wider target market. The CCTA will continue to support and guide its members going forward. Look out for further communications as our dialogue with the FCA develops. No doubt the regulator’s focus will move from implementation and embedding of the Duty to reviews and insights into industry-wide compliance with the requirements of the Duty. In addition, firms should continue to monitor the FCA’s Consumer Duty webpage for firms, which is regularly updated and can provide useful insights into the regulator’s expectations. This will also include information around their latest event ‘Consumer Duty- 1 year on’, held on 31st July 2024. A recording of the webinar is now available. The event focused on the impact in this first year, examples of good practice, areas for improvement, and FCA priorities for the year ahead. We will continue to engage with the regulator with the regulator as their insights on the Duty develop and it will continue to be a topic of discussion at many events, including our annual conference in October. As ever, the CCTA Advice Line Service is available for any member seeking support …

What’s happening in the motor finance market?

Published 26 July 2024

After a mortgage, the purchase of a vehicle is often the second largest expense within a household, which is why a range of motor finance options have developed over the years to assist families in making this purchase. The CCTA membership includes motor finance firms of different sizes with various specialisms across the sector. With motor finance being such a large financial services sector, the Financial Conduct Authority (FCA) has carried out various pieces of work into the sector over the years. In 2021, the FCA banned what are referred to as discretionary commission arrangements (DCAs). This removed the incentive for brokers to increase the interest rate that a customer pays for their motor finance. Moving forward to January this year, the FCA announced that they would be carrying out further work on the issue of DCAs. They confirmed that there had been a high number of complaints from customers (some driven by claims management companies) to motor finance firms claiming compensation for commission arrangements prior to the introduction of the ban. The FCA believed that some firms were unfairly rejecting such complaints from consumers based on the applicable legal and/or regulatory requirements at the time of the transaction. This was also reflected in two Financial Ombudsman Service (FOS) decisions where the complaints had initially been rejected by firms but were overturned by the FOS upon investigation. Recognising the potential large-scale impact of these developments, the FCA announced the following: Use of the powers under s166 of the Financial Services and Markets Act (FSMA) to appoint a skilled person to review historical sales of motor finance agreements involving DCAs. A temporary pause in the 8-week limit within which firms are required to provide a final response to complaints. Extending the time limit for complainants to refer complaints about DCAs to the FOS after a final response. As part of the skilled persons review many motor finance firms from across the sector were contacted and asked to share information with the regulator. This included asking firms for full, clear and transparent information in respect of their past DCAs which had to be supplied at pace. Through this the FCA hopes to gain a thorough understanding of the different types of commission models within different businesses. The regulator is now analysing the information it has received. If it finds widespread misconduct it will act accordingly. While the FCA carries out its investigation, there are also lots of relevant cases going through the courts which may have an impact on the FCA’s action. This includes a judicial review of the FOS, launched by Barclays which we understand the FOS will challenge. The FCA plans to communicate a decision on next steps by the end of September but these court cases on likely to have an impact on proceedings which could see the FCA having to extend its review. The CCTA regularly holds roundtable sessions for our motor finance members which cover issues such as the above. If you are interested in attending or …

What would be in the CCTA Manifesto?

Published 02 July 2024

As we head towards polling day for the general election on the 4th of July, we have now seen the manifestos from all the main political parties. The purpose of a manifesto is to outline the steps a party would take, if they get the opportunity to form a government. From what we have seen most of the 2024 manifestos have been light on the detail around consumer credit and financial inclusion- understandably there are other issues that grab the headlines like NHS waiting lists and illegal migration. But this has led us to think about what we would put in the “CCTA Manifesto”. What would the CCTA be calling for from the next government as the main trade association representing alternative lenders? Firstly, access to credit has been central to the CCTA since its creation in 1871 so it’s not surprising that we would want the future government to address the sharp contraction we have seen in the alternative lending market. We don’t have enough lenders to provide credit to poorly and under-served communities. Lenders have left the market in recent years, and new firms have not entered it. There has been a sharp rise in illegal lending. We would be happy to work with any organisation looking to address the issue of access to credit. We are also looking for a more positive narrative from policymakers when talking about the sector. Taking the points above, we need them to accept where we are publicly. They also need to discuss how the future will involve lenders who are Consumer Credit Trade Association members. Though we all support the growth of community lenders and Credit Unions (indeed they form part of the CCTA membership) they cannot alone fill the gap left by commercial lenders. A more positive narrative from policymakers would reassure and encourage investors and new entrants. We will work to help government understand the non-prime customer. The CCTA is also supportive of more regulatory certainty. FCA rules are open to interpretation, making it difficult for lenders to know where they stand. In recent times we have been working with the CCTA members to better understand FCA’s expectations. This is particularly important for smaller firms. Focusing on SMEs, the CCTA is made up of a range of small and specialist lenders. We would ask for the government to understand the additional regulatory burden that falls on these firms. There is also a need to ensure these firms can access funds and basic banking services moving forward. We would also call on the next government to address the current claims culture. Claims management companies (CMCs) have had a big impact on the alternative lending sector in recent years. The FOS’ current consultation on charging CMCs to access their service is a welcome step but the next government must ensure that this change gets over the line and allows the necessary parliamentary time. If not, CMCs will continue to exploit different sectors of the market and continue to deliver poor outcomes …

FOS consults on charging CMCs

Published 10 June 2024

A general election wasn’t the only announcement we saw in late May. The Financial Ombudsman Service (FOS) also published its next consultation on plans to move forward with charging professional representatives, including Claims Management Companies (CMCs), to access their service. We, along with many CCTA members, responded to the last consultation calling for action to be taken. The FOS are consulting on a £250 case fee charge for CMCs. If a CMC wins a case, that would be reduced to £75. If the CMC loses, the £250 would be used to reduce the lender’s fee. CMCs will be allowed three free cases a year, like all other financial services firms. The service remains free to those who bring their case directly to FOS as well as families and friends, charities, and voluntary organisations who may be helping them. We welcome plans to move ahead with charging CMCs but don’t see why they would be treated any differently from lenders. For that reason, we think the full case fee of £650 should be applied to CMCs when bringing a case to the FOS. We are supportive of the principle that there could be some form of discount in the fee if the CMC is successful in their case. Over the last two years, over 20% of cases referred to the FOS have been brought by professional representatives. Of these cases, fewer than 25% result in a different outcome for the complainant than they have already been offered by the responding firm. The consultation tells us that consumers achieve a better outcome when they complain directly, rather than using a CMC. (32% of consumers bringing their case without representation achieve a better outcome). Obviously, we want to address the unfairness of the system but hopefully improve CMC behaviour to deliver a better experience for consumers too. And there is also a role for the wider industry to play in educating consumers that they do not need a CMC to represent them. Where complaints are upheld, CMCs and professional representatives take a significant proportion of redress awarded to their clients. Consumers would keep the full value of any redress awarded if they brought the case to directly to the FOS. These companies can send in large volumes of cases with little prospect of being upheld and they are often poorly presented. This can have a significant impact on the FOS’s ability to help others who have come directly, and drives up the Ombudsman costs. For too long these firms have been able to submit claims of a poor nature, because win or lose the lender will have to pay the case fee. The CCTA has been calling for change over recent years with HM Treasury, the FOS and the FCA.  The introduction of a fee should act as a deterrent for firms to submit poor quality claims and reset the balance. We will be responding to the consultation and working with CCTA members on their responses. The consultation closes on the 4th of July. …

The general election and a possible change in government

Published 30 May 2024

On the 22nd of May, Rishi Sunak surprised most of the UK by calling a General Election to take place on the 4th of July. Much of the political world thought it would take place in the autumn, but there was a growing sense that this was as good as it would get for the Conservatives. Though polls can be misleading and often narrow as election day approaches, Labour has consistently been around 20 points ahead of the Conservatives. It seems unlikely that the Tories will feature in the next government. Labour looks likely to be at the head of the next government in some form, possibly with a majority, a minority, or a coalition arrangement.   What would a Labour government mean for the alternative lending sector? Labour has said very little that would worry or calm the sector. We believe they may attempt to get through this campaign by saying as little as possible. The more it reveals its policies, the more the Conservatives can attack. In the few relevant statements, they have picked up on concerns about Buy-Now-Pay-Later. After pointing out this government’s regulatory delays, we can assume that they will want to move quickly. They have also addressed concerns about access to credit as part of a wider discussion on financial inclusion. They may also consider introducing a Fair Banking Act that would require the High Street banks to either lend directly to unserved communities or provide funding to other lenders that serve those groups. This has had some impact in the US so they may look to replicate something similar. Elsewhere, Labour has been careful to welcome the changes brought by the Consumer Duty but joined others in criticising the FCA, where the regulator has been more aggressive. They have floated the idea of more scrutiny. Earlier this year, Labour published “Financing Growth”, outlining some of its plans for financial services. This was seen as an outstretched hand to the City. The party is keen to appear pro-business and shed the views of the Corbyn era in this election. At a high level, the paper called for growth and the need to increase international competitiveness, recognising the importance of the FCA’s secondary objective. The report also discussed the need to embrace innovation and fintech, such as AI and Open Banking, with appropriate protections for the consumer.   What does the election mean for the review of the Consumer Credit Act? The future of the current review of the Consumer Credit Act is uncertain. Work on the reform has been placed on hold as we enter the election period, and it’s unclear whether or when this might restart. Labour has previously said that the Act requires updating for the digital age, so they may well continue with the review, but the election will introduce more delay into the process.   What is happening elsewhere? Beyond the Labour Party, there has also been some relevant activity in Parliament. Before the election announcement, the House of Lords Financial …

Bank’s liability for customer fraud
Supreme Court gives its decision

Published 27 May 2024

The Supreme Court has given its eagerly awaited decision in the case of Philipps against Barclays Bank UK PLC. The litigation involved an “authorised push payment” (APP) fraud. In this type of dishonesty, the victim is persuaded to authorise their bank to send a payment to an account controlled by a fraudster. Many bank customers mistakenly think that a bank will always have a legal duty to refund them should this happen. However, the decision of this case illustrates that it will all depend on the circumstances surrounding the transfer. FACTS OF THE CASE Mrs Philipps instructed Barclays to transfer no less than £700,000 from her current account to bank accounts in the United Arab Emirates which were controlled by fraudsters. Attempts to have the funds returned to her were fruitless. THE LEGAL ARGUMENT Mrs Philipps argued that her bank were liable for the loss because they owed her a common law duty of care not to carry out her instructions if, as she alleged, the bank had reasonable grounds for believing that she was being defrauded. The Court of Appeal held that in principle Barclays did owe their customer a duty of care. Whether such a duty existed would depend upon the particular circumstances of the case which could only be determined if evidence was led. Reversing the Court of Appeal’s decision the Supreme Court held that even if the facts as stated were proved the bank did not owe such a duty. Mrs Philipps also advanced a contractual argument by focussing on the bank’s current account written terms and conditions as well as conditions implied by the common law. As far as the bank’s written terms were concerned, the Supreme Court held there was nothing in them to the effect that instructions should not be implemented where the bank had reasonable grounds for believing that their customer was being tricked into making such a transfer request. The court rejected her argument that no express term was needed. They did not agree that the bank’s duty was either recognised by common law or was contractually implied. In the court’s opinion such a duty would be beyond a bank’s usual obligation to its customer. On the contrary. In effect the court held that if a customer instructed a bank to make a payment transfer in the circumstances presented to them by Mrs Philipps then they would have a duty to implement the order. In so doing Barclays would be acting as Mrs Philipps’ agent and not have a duty to assess the transaction’s risk. The court differentiated Mrs Philiips’ position with the seminal 1992 Appeal Court’s decision in “Quincare”. In Quincare the bank’s branch had received instructions from the customer’s agent to make the transfer in circumstances where the bank had reasonable grounds for believing that the agent was defrauding their customer for the agent’s own benefit. In these circumstances the appeal court held that the bank should have not have acted on these orders because they would be unable …

CCTA comment on new report from Fair4All Finance

Published 23 May 2024

Commenting on Fair4All Finance’s new report “Access to credit & illegal lending”, the CCTA said: We welcome the publication of today’s report, which outlines the current state of access to credit for many and the impact of illegal lending. They are right to point out that the shape of the market is as important as its size. They are also right to say that the UK credit market is not functioning properly for lower income households, many of whom have lost access to credit. We have been trying to draw attention to these issues for some time, having seen the major contraction[1] in the alternative lending sector. This has pushed people to less desirable options. There needs to be more support for tackling illegal money lending, especially as criminals look to use digital channels to exploit more victims. There is also a need to increase legal options. For that reason, it is good to see that the report states that a refreshed high-cost credit market can provide access for some consumers. There is also recognition that community finance alone cannot fill the gap left by commercial lenders. The market needs a range of small and specialist lenders to meet demand and provide competition. One of the report recommendations is about the need for regulatory adjustments to improve the market. Fair4All Finance is calling for a rebalancing between customer protection and the need to provide access to credit. The regulator and industry must discuss how to achieve this to ensure access to legal, regulated credit for those who need it the most. [1] From being 4% of the outstanding consumer credit loans market in 2013, forms of legal, high cost credit reduced to under 0.3% by 2023 (Fair4All Finance). Industry estimates that this is a fall of about £3 billion.  

Treasury Committee looks at the issue of de-banking

Published 20 May 2024

Earlier this month the influential Treasury Select Committee published their report into SME Finance. The Committee contains MPs from across the House of Commons, representing all major parties. The report was commissioned to look at the recent experiences of small businesses. It was designed to consider the issue of access to finance and what else can be done to encourage business growth. The last few years have been tough for small businesses across all industries. Rising inflation has had a severe impact on costs, and a global pandemic changed things for everyone. That said, SME firms make a substantial contribution to the UK economy which should not be undervalued. For that reason, we cannot ignore that SMEs are struggling with narrow access to finance, in the face of these rising cost pressures and higher interest rates and are generally pessimistic about their ability to raise funds. Many report struggling to attract new investment for their businesses. The parliamentary committee found that small firms are being put off from innovating and growing by damaging financial regulations and inadequate support from banks. We are particularly interested in the issue of de-banking. Within the CCTA, we know that many smaller members have struggled with access to financial banking facilities. Pawnbrokers have had a particularly bad time with the issue of de-banking. Perhaps unsurprisingly, the Committee found that over 140,000 SME had their accounts closed last year. We know that access to investment and banking services are lifelines for any business. The Committee has recommended that any small business doing legitimate work should have access to a bank account. The Committee members heard that many accounts were closed because they fell into “undesirable” sectors. Pawnbroking was included here, despite being a service that has been provided for hundreds and years and helps those individuals that struggle to access finance themselves. As a result, the Committee is calling on the Financial Conduct Authority (FCA) to force banks to be more transparent about why decisions to de-bank businesses are taken. The FCA should also continue its work to better understand criteria for account closure. Committee members also believe the regulator should compel firms to send them the number of business accounts they’ve closed each quarter split by reason. The Treasury has assured the Committee that legislative changes will be introduced to crack down on the de-banking of businesses in the form of a Statutory Instrument. When questioned, the Economic Secretary Bim Afolami MP, and Treasury officials, said that the planned changes to termination rules would apply to business accounts. The plans also include extending notice periods to 90 days and having to give a clear reason for closure, except where it would be unlawful to do so. The Treasury is expected to publish regulations soon. It is good to see the Treasury Select Committee shining a light on these issues. The CCTA will engage with Treasury officials at our regular meetings to ensure the publication of the new rules is not delayed. If members have had …