The importance of smaller lenders

Published 23 January 2025

The news that Santander may leave the UK market has grabbed the headlines. There has been, and we are sure there will continue to be, a lot of discussion about the regulatory burden. The costs mentioned are significant, often more like telephone numbers. The risk is that we focus on those big numbers and the big brands. However, elsewhere, some lenders face burdens that are certainly smaller numbers but can significantly impact that firm. Last year, firms moved to implement the Consumer Duty, introducing new systems and structures. Over recent months, we have seen movement on new data systems required by the FCA. There are plans for a new governance body for credit information funded primarily by lenders. All of this adds up and makes it more challenging to operate. We would suggest that smaller independent lenders frequently provide agility, innovation, and customisation to meet the needs of UK families. We mustn’t lose sight of their health. Filling the gaps Filling that gap has always been an idea that is close to the CCTA. We were formed in 1891 by a small group of retailers and lenders that saw the need for new regulated credit products. Smaller lenders have always looked for the gaps as the banks focus on smoothing their processes. Many large banks focus on high-volume, standardised lending products, prioritising economies of scale. Unfortunately, this approach often leaves certain groups with non-standard credit histories or special borrowing requirements without access to financial support. Doing so, they help ensure financial inclusion, enabling consumers and small businesses to access credit that might otherwise be unavailable. This is particularly important in the consumer credit sector, where access to affordable lending can make a critical difference in people’s lives. Driving innovation and competition Smaller lenders are often at the forefront of innovation in financial services. Unencumbered by the bureaucratic layers that can stifle creativity in larger institutions, they are more nimble in adapting to emerging technologies and market trends. Many have pioneered advancements in digital lending platforms, open banking, and data-driven credit assessments, setting new standards for efficiency and customer experience. Moreover, smaller lenders foster competition within the financial services industry. Their presence challenges the dominance of larger players, encouraging a broader range of products and services at more competitive rates. This dynamic benefits consumers, ensuring they can access choices that better suit their needs. Supporting local economies The impact of smaller lenders extends beyond their immediate customers to the communities they serve. Unlike global banking giants, many smaller lenders have strong ties to their local areas, which enables them to understand and respond to the unique challenges and opportunities within those communities. Smaller lenders often take the time to build relationships and trust within their communities, creating a ripple effect of economic resilience and opportunity. That includes CDFIs and credit unions, alongside commercial branch-based lenders. This localised approach is particularly evident in areas where access to finance is limited due to geographic or socioeconomic factors. We have seen the loss of …

An update on motor finance

Published 19 December 2024

As many of you will know, the motor finance world was hit hard in October with the Court of Appeal judgment in the Johnson v FirstRand Bank Limited, Wrench v FirstRand Bank Limited and Hopcraft v Close Brothers cases. The Court of Appeal decided it was unlawful for motor finance brokers to receive a commission from the lender providing motor finance without getting the customer’s informed consent to the payment. This decision surprised many because this case marks a significant shift in how Courts view lenders’ duties toward consumers in cases involving commission payments. Firms were tasked with making changes to their processes very quickly. This decision came on the back of what has already been a very busy year for motor finance providers. In January this year, the FCA launched a review of historical motor finance Discretionary Commission Arrangements (DCAs). The review seeks to understand if there was widespread misconduct related to DCAs before the 2021 ban, if consumers have lost out and, if so, the best way to make sure appropriate compensation is paid in an orderly, consistent and efficient way. Alongside the review, motor finance firms were given more time to provide final responses to complaints about motor finance where a DCA was involved, and consumers more time to refer their complaints to the FOS. This was to prevent inconsistent and inefficient outcomes for consumers and knock-on effects on firms and the market while the FCA reviewed the issue and determined the best way forward. In September, the FCA further extended this until 4 December 2025. Before deciding its next steps, the FCA wanted to take account of relevant court decisions. These included the judicial review by Barclays Partner Finance of a Financial Ombudsman decision relating to a DCA in a motor finance agreement and the recent Court of Appeal judgment mentioned above. Last week we got the news that the Supreme Court will hear an appeal against the Court of Appeal’s judgment. This will likely take place between January and mid-April next year. While the Supreme Court will hear an appeal, firms must still comply with the law as it stands when arranging new motor finance agreements. There was further movement today when the FCA confirmed that it will extend the time firms have to respond to complaints about motor finance agreements, not involving a DCA. Firms now have until after 4 December 2025 to provide a final response to non-DCAs, in line with the extension already provided for complaints involving DCAs. The regulator has also provided guidance for firms when communicating with affected customers. If you are reviewing your approach, we suggest this as an essential checklist of issues. So, it has undoubtedly been a tumultuous year for the sector. Firms should be focusing on ensuring that they are communicating with customers in the right way, whilst also preparing for the continuation of the FCA’s review. The FCA plans to set out next steps in May 2025, but this will be somewhat dependent on the progress of the appeal to the Supreme Court and the …

Movement on access to credit

Published 08 November 2024

Access to credit has always been central to the work of the CCTA since it was founded over 130 years ago. We have a long-standing project to protect access to responsible credit for customers that often struggle to borrow elsewhere. In recent months, we have seen a greater interest in access to credit and financial inclusion from a range of external stakeholders which as been encouraging. Firstly, we have seen this from the new Labour Government. Prior to the announcement of the General Election, the Labour Party outlined its commitment to a National Financial Inclusion Strategy, should it gain power. This was reinforced by Tulip Siddiq MP, the Economic Secretary, at the party conference which took place in September. The Secretary said that the strategy will be designed and implemented by a committee chaired by a treasury minister with representation across government, regulators, and industry. Through writing to the Secretary, and in our regular discussions with HM Treasury officials, we have expressed our desire to play a role in the process. We believe the experience our members have of lending to those currently will be vital to the development of the strategy. Over the last few years, we have tried to draw attention to the significant reduction in the supply of regulated credit for those consumers who cannot access the prime credit market. Well-regulated alternative credit can play a role in meeting unmet demand within the wider consumer credit market. Though we support Credit Unions and CDFIs—indeed, they form part of the CCTA membership—these organisations alone cannot fill the gap that has been left. We believe a blend of commercial and not-for-profit providers is needed to solve the current problems and address the use of loan sharks. This is the message we have been trying to convey in recent meetings. Our conference also was an opportunity to hear from other stakeholders about their work in this area. Fair4all Finance talked about their desire to work with the private sector on new products, referencing the c.2 billion of estimated current unmet, but potentially commercially viable, credit quoted recently by L.E.K. Consulting. Discussions continue with members of the CCTA about potential partnerships. We were also lucky enough to have Chris Pond, Chair of the Financial Inclusion Commission speak. Unsurprisingly, they are supportive of the new Strategy promised by the Government. The Commission has released new research carried out by the Centre on Household Assets and Savings Management (CHASM) at Birmingham University, which highlights the harms financial exclusion continues to cause in communities across the UK. This is a problem that needs to be addressed. We have also seen the regulator take a greater interest in access to credit in recent times. The FCA has been keen to engage with the sector on the issue and we have taken the opportunity to raise the role the industry can play in improving access to credit, as part of wider discussions on growth and innovation. Financial exclusion is costly to the country. The credit products offered by …

CCTA Annual Conference 2024

Published 10 October 2024

Last week we held our annual conference at the Radisson Blu, Manchester airport. In keeping with recent tradition, we held our member dinner the night before the conference. Our dinner provided the opportunity for attendees to catch up with colleagues from across the sector and discuss relevant issues in a relaxed setting. Conference kicked off the next morning with our Chair, Mark Fiander welcoming delegates to this year’s event. Jason Wassell, CEO, then provided an update on the work of the association and covered some of the topics that would be discussed during the day. We also got a presentation on our learning and development portal, CCTA Academy, from Naveed Asif. Walker Morris presented on the current regulatory structure and questioned where ultimate authority might lie. A thought-provoking session. We were then joined by a knowledgeable range of panellists for our session on access to credit. Fair4all Finance talked about their recent research in this area, while the FCA said there is a place for high-cost credit within responsible lending. Chris Pond from the Financial Inclusion Commission talked about their campaign for the FCA to have regard for financial inclusion. It was widely agreed that the commercial sector has a role to play in ensuring access. That session was followed by Robert McKechnie of Equifax UK delivering a keynote presentation on what the CRA sector is currently seeing in consumer credit. CCTA members are always interested to see trends and insights from the wider sector. Our last panel sessions of the day focused on the regulatory environment and the alternative lending customer. The regulatory panel talked about the implementation of the Consumer Duty, the current review of the motor finance market, and further changes expected in 2025. The consumer panel looked at the demographics of borrowers and why they need the products offered by CCTA members. Assessing vulnerability and how to help those struggling was also discussed. The last session of the day kicked off with a keynote speech from Square 4 Partners on how to take on complacency within firms. The presentation looked at areas businesses should be reviewing often to ensure continuous improvement- especially with the Consumer Duty framework now in place. For our final keynote speech, we heard from Alex MacDonald of the Financial Ombudsman Service. It is always important for industry to engage with the Ombudsman, so it was great to them as part of the agenda once again. Alex shared some updated from the Ombudsman before questions from the audience. It was once again a packed agenda with lots of topics up for discussion. We would like to thank all our speakers and panellists, along with our sponsors for supporting the event. Thanks also to those that were able to attend on the day. We are already thinking about how the discussions play into the work of the association in the coming months. As always, if there is something you want to discuss contact the team.  

FCA keeps a firm grip on the oversight of Appointed Representatives

Published 12 September 2024

Last week the FCA published the findings of its review of how principal firms are meeting its enhanced appointed representative rules, introduced in December 2022. As a reminder, an appointed representative (AR) is a firm that undertakes regulated activities and acts as an agent for a firm directly authorised by the FCA. This firm is known as the appointed representative’s “principal” firm. The FCA’s review involved a telephone survey with 251 principals and in-depth assessments of documentation from 23 firms and they are keen to share their findings. The current rules state that principal firms must oversee their ARs effectively and are responsible for making sure their ARs comply with our rules in relation to their activities as ARs. The FCA feels that while some principals do this effectively, not all firms adequately oversee the activities of their ARs. The changes made to the rules were designed to ensure that principals manage their ARs better. Following the introduction of the new rules and enhanced expectations for principal firms, the FCA has tested the implementation of how firms are embedding the new rules. The regulator reported examples of good practice from principals which included keeping clear documentation to show compliance with the FCA’s enhanced rules and using a broad range of checks and information to oversee and monitor ARs’ activities. But at same time the FCA found some firms were just taking a tick-box approach to complying with its rules, relying on basic information like website checks, or using self-declarations from their ARs, to demonstrate effective oversight. The review also found: 1 in 5 principals had not carried out a required self-assessment or annual review of their ARs. Approximately half of principals were not regularly reviewing their AR agreements. A third of principals were not using data or management information to keep tabs on whether ARs were acting within the scope of AR agreements. Most firms had not changed their AR onboarding or termination procedures since the rules were introduced. Unsurprisingly, the Consumer Duty was also mentioned as part of the review. The FCA thought it good where they saw firms embedding Consumer Duty into their review of ARs. Examples included considering fair value assessments and training for staff on Consumer Duty. The FCA has reminded firms who have ARs or intend to have ARs in future that they should read and consider the findings when assessing their obligations as principals under the rules. Principals should ensure they have assessed their existing processes in response to the new rules and have sufficiently documented any revisions that they can call on if required. The regulator will not hesitate to take swift action where they see principals are not meeting standards in the future. Like much of the regulatory regime, this is a continuous process.  FCA will monitor compliance with the rules, with a particular focus on annual reviews, self-assessments, and the quality of oversight of ARs. These are the key areas that principles should be focusing on moving forward.    

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 …

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 …

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.