Diversity and inclusion
A regulatory issue

Published 14 October 2021

Diversity is by its nature diverse. When the Financial Conduct Authority (FCA) talks about diversity in financial services firms, it is referring to a broad range of backgrounds and characteristics which apply to a firms’ work force and leadership, as well as the customers it serves. Through several speeches and papers published over the last year or so, the FCA has clearly indicated that diversity and inclusion are priority considerations and will remain so in the coming years. WHAT HAS THE FCA SAID? The FCA has been sending strong messages around diversity and inclusion for several years, perhaps most significant in recent months are Nikhil Rathi’s speech in March 2021 and the discussion paper, DP 21/2, published jointly by the FCA, Prudential Regulation Authority and Bank of England. In his speech, Mr Rathi noted the value delivered by having diverse leadership teams and workforces, which, when supported by an inclusive culture, lead to people being able to speak out and challenge “group think”. Empowering people with diverse characteristics and background not only ensures a better working environment, but also enable more effective identification of the needs of customers as well as effective mitigation of risk. These messages were repeated in the regulators’ joint discussion paper DP 21/2. The purpose of the paper is to help regulators understand how they can push the rate of change and improvement in forms around diversity and inclusion. THE ISSUES The issues breakdown into distinct areas of interest: Driving better customer outcomes: The regulators are clear that understanding the diverse needs of consumers using a firm’s services will better enable that firm to deliver fair and appropriate financial services. Key to this is ensuring products meet customers’ needs, perform as expected, including in times of stress, and deliver fair value. Composition of the workforce: Having a diverse workforce which reflects a firm’s target market better enables it to understand customer perspectives and needs. Culture and inclusion: Providing a culture of psychological safety in which people can feel able to speak up and present differing perspectives help to avoid “group think” where a dominant, and potentially harmful, view is reinforced. Leadership: Diversity at board and senior manager level should be pursued with the aim not only of delivering all the positive outcomes referred to above, but also as a means of better managing risk and promoting business success. The regulators are only seeking views on how it might accelerate change at this stage. However, there is a consistency emerging in terms of the areas of regulatory focus. Taking those into account it seems appropriate to: Review your products: Who are your target customers? What are their needs? Are you confident your product is reaching those customers and meeting their needs? How diverse is your workforce? How do your HR and recruitment policies promote the cultivation of diversity? How are you tracking progress in representation and advancement in your business? Leadership: Is your firm’s leadership diverse? Does it reflect your customer base? Does it understand the needs …

Upsetting the apple cart
Debt deferment – CCA/FSMA implications

Published 14 October 2021

DEBT DEFERMENT: CCA/FSMA IMPLICATIONS The Court of Appeal in CFL Finance v Laser Trust (2021) decided that the Consumer Credit Act 1974 (“CCA”) can apply to a settlement agreement, where payment of a debt by an “individual” is deferred, even if the CCA did not apply to the debt prior to the settlement, as in this case, where a loan of £3 million had been made to a company, guaranteed by Mr Gertner. The existence of a debt has to be sufficiently clear for an agreement providing for future payment to constitute “credit” with the CCA. The Court of Appeal did not express a concluded view on where the dividing line lies between a debt (to which the CCA could apply) and a mere claim (to which the CCA could not), as the Court had only heard legal arguments from the debtor (the lender was not represented at the hearing of the appeal). The Court of Appeal decided that: a) the guarantor’s defence was clearly invalid in law and had no real prospect of succeeding; and b) there was a very real possibility that the guarantor did not believe the defence to have even a fair chance of success. For that reason, there was a triable issue as to whether the settlement agreement provided the guarantor with “credit” within the CCA and is at present, unenforceable for non-compliance with one or more sections of the CCA: s.40 (enforcement of agreements made by unlicensed trader), s.61-64 (making the agreement), s.77A (statements to be provided for fixed sum credit agreements) and s.86B (notice of sums in arrears under fixed sum credit agreements). WHEN WILL THE CCA APPLY TO A SETTLEMENT? The CCA will only apply to a settlement agreement if: i) there is a debt; ii) the debt is owed by an “individual” (as defined in the CCA); iii) the debtor has agreed to provide “consideration” (i.e. to pay money or give something of value) in exchange for the creditor’s agreement to accept deferred payment (e.g. make a contribution to the creditor’s legal costs of the dispute). Furthermore, the CCA will not apply if: a) the creditor simply refrained from enforcing its right to immediate payment (i.e. forbearance); or b) the individual recognised the defence to lack “even a fair chance of success” (i.e. no consideration for the settlement); or c) the individual genuinely disputed the creditor’s claim in its entirety on substantial grounds (i.e. no debt and, therefore, no “credit”); or d) the settlement is embodied in a court order (not a schedule to it). ENFORCEMENT If the CCA applies and the settlement agreement does not comply with CCA requirements (e.g. proper execution, periodic statements, notice of arrears), the settlement is unenforceable without an enforcement order, which the court will not grant unless (amongst other things) it considers it just to do so having regard to (amongst other things) the prejudice caused by the contravention in question and the degree of culpability for it. If the lender is not authorised by …

Settling the meaning of credit
CFL Finance Ltd V Gertner

Published 14 October 2021

The Consumer Credit Act 1974 (CCA) defines “credit” as “a cash loan, and any other form of financial accommodation”. That definition is extremely wide, and credit can therefore include (but is certainly not limited to) a loan, a hire purchase agreement, or any other agreement allowing a debtor time to settle their indebtedness in return for some form of consideration (e.g. interest). Until very recently it was considered common ground that terms embodied in a settlement agreement or Tomlin Order, by which parties settle a dispute, are not subject to the CCA. However, the recent Court of Appeal case of CFL Finance Ltd v Gertner raises the possibility that some settlement agreements and/or schedules to Tomlin Orders entered into between funders and individuals might be regulated by the CCA. CFL FINANCE LTD V GERTNER Mr Gertner guaranteed a loan facility provided by CFL Finance (CFL) to another company, who defaulted on the repayment terms. CFL therefore issued proceedings against Mr Gertner, which were compromised by a Tomlin Order. The schedule provided for repayment of the debt, plus interest in the case of a default. Mr Gertner defaulted under the Tomlin Order, and CFL petitioned for his bankruptcy. Mr Gertner defended that petition on the basis that, amongst other things, the Tomlin Order’s schedule provided him with a “form of financial accommodation” and was therefore “credit” under the CCA. As the schedule was not CCA-compliant, Mr Gertner argued that the Tomlin Order was unenforceable as a regulated credit agreement under the CCA. This, he said, was a genuine ground for defending the ongoing bankruptcy petition. In the first instance, the Court dismissed Mr Gertner’s defences, and a bankruptcy order was made. On appeal, however, the bankruptcy petition was dismissed on entirely unrelated grounds. CFL appealed the decision on this unrelated ground, and Mr Gertner cross appealed on his CCA point. Ultimately, following the original appeal being struck out, only Mr Gertner’s CCA argument was considered (unopposed) at the appeal hearing. THE CCA ARGUMENT In Gertner, the Court considered two fundamental questions: does the CCA apply to the schedule to a Tomlin Order; and did a settlement agreement entered into between Mr Gertner and CFL provide Mr Gertner with “credit”? The parties agreed that the CCA does not apply to terms embodied in a Court Order. However, and crucially, whilst Tomlin Orders are approved by the Court the schedules attached to them are not. The Court concluded that the CCA can apply to a Tomlin Order’s schedule because it is ultimately a contract between the parties. The inevitable impact of this decision is that the schedules to Tomlin Orders, and settlement agreements themselves, are at risk of being caught by the CCA. As regards the second question, the Court of Appeal ultimately agreed with Mr Gertner and concluded that challenging whether the Tomlin Order’s schedule was unenforceable for being non CCA-compliant was a genuinely triable issue and therefore not appropriate for use in petitioning a debtor for bankruptcy. IMPACT Although not binding …

A hidden cost?
Commission claims and the decision in Wood and Pengelly

Published 14 October 2021

We are seeing a growing number of claims by borrowers concerning alleged undisclosed commission payments by lenders to brokers/agents/introducers. If the borrower was not aware that commission would be paid at all, such payments may be classed as ‘secret commission’. If they were aware that commission may be payable but not of the amounts, such payments may be classed as ‘half secret commission’. In both scenarios, the broker and lender may face claims from the borrower. NO FIDUCIARY RELATIONSHIP REQUIRED IN SECRET COMMISSION CLAIMS The Court of Appeal confirmed in Wood and Pengelly that a fiduciary relationship between broker and borrower is not a pre-condition for relief against the lender in respect of secret commissions, which the court treats as a form of bribe/special category of fraud. The question is whether the broker owed a duty to be impartial and to give disinterested advice, information or recommendations. This appears wide enough to cover non-advised sales. Subject to limitation, successful borrowers in such claims are entitled to recover (from broker or lender) the amount of commission paid (without having to show loss) or damages for actual loss suffered as a result of entering into the agreement. Importantly, the borrower is also entitled to rescind the agreement as of right, subject to making any necessary counter-restitution (i.e. returning any benefits received under the agreement). WHEN IS A COMMISSION ‘SECRET’ OR ‘HALF SECRET’? In Wood and Pengelly, the borrowers entered into loan agreements and mortgages via a broker. The broker’s terms said that it may receive commission from the lender and the borrower would be told the amount in writing, before taking out a mortgage: if less than £250, the broker would confirm that it would receive up to that amount; if £250 or more, it would tell the borrower the exact amount. The lender paid commission. The borrowers were not informed. It was argued that the payments were half secret because the terms put the borrowers on notice that a commission might be paid. The court disagreed. The terms imposed an unqualified obligation on the broker to inform the borrower, before a mortgage was taken out, of the fee amount. The only conclusion from the absence of any notification as required was that no commission was to be paid. These were therefore secret, not half secret, commissions. In Hurstanger v Wilson, the leading authority on half secret commissions, the court described them as a half-way house between a wholly secret commission and one which is sufficiently disclosed to negate secrecy but insufficiently disclosed to obtain the borrower’s informed consent. The court in Wood and Pengelly stopped short of overruling the conclusion in Hurstanger that a fiduciary relationship is required in such claims. The key difference compared with wholly secret cases is that the court has a discretion to award the most appropriate remedy in the circumstances, which can but will not necessarily include rescission. While Hurstanger is still good law, it remains to be seen how the interpretation of a broker’s fiduciary …

A TAX ON BUSINESS?
THE DOUBLE WHAMMY OF THE CIVIL COURTS

Equivo

Published 14 October 2021

Those using the civil courts to recover debt have faced a double whammy during 2021. ALIGNMENT Firstly, the government’s response, in March 2021, to its consultation on aligning fees for paper based and online claims, was that online discounts had fulfilled their role in persuading major users to move online and it was now unfair to distinguish between those who continued to issue on paper and those who issued online. Whilst understandable in principle, the solution is not. Despite universal opposition to the proposal, rather than bringing the fees for paper claims down, the government chose to increase online fees. Government’s argument is that income received from fees covers less than half the cost of running courts and tribunals. Whilst correct, it is also disingenuous as those figures relate to the court service as a whole whereas fee alignment relates to the civil courts alone. The reality is fees generated in the civil courts exceed the costs of running civil courts and the excess is used to cross subsidise other elements of the court service (criminal and family proceedings). Government’s second argument is “those court users who can afford to, should contribute more towards the operations of HM Courts & Tribunals Service (HMCTS)”. Effectively, the government is saying that, to recover outstanding debt, you will pay more than the costs of doing so. The excess is, effectively, a tax on those using the civil courts. Even that argument is flawed – court fees in question (where judgment is granted) become part of the debt due from the judgment debtor (often a consumer) and, therefore, the burden of these increased fees is, ultimately, placed on them. FEE INCREASES Now government has responded to a second consultation, this time about inflationary increases to court fees. Again, despite vocal opposition considering the continued poor service levels faced by users of the court service, these increases which cover some 129 fees backdated to cover inflation since August 2016 came into force on 30 September 2021. The same arguments are being propagated by government – that the income generated by fees falls far short of the costs of running the court service. The government points to section 180 of the Anti-social Behaviour, Crime and Policing Act 2014 which allows the Lord Chancellor to set court fees at a level above the costs of the underlying service. Again, it is recognised that other elements of the court service, including family and criminal, need to be properly funded. It is right that society looks to ensure that those who need access to the courts (for example, vulnerable users seeking non-molestation orders because of domestic abuse) can obtain such access and that fees should not be a barrier. The question, however, remains whether users of the civil courts should, effectively, be taxed to pay for this or should broader taxation policy be used to ensure sufficient funding. This is particularly the case where there remains continued disgruntlement from those who use the civil courts as to the service …

Frustration navigation
Providing frictionless service to customers

Published 14 October 2021

We all appreciate vulnerable customers in collections require help, but do our systems deliver that? Vulnerable customers, particularly, need to feel like they can contact third parties to discuss their situation without judgment. Let’s face it, it’s often not easy for customers to pluck up the courage to get in touch but, when they do, they really want and need slick, frictionless processes. That’s why having customer centric systems for customers and colleagues to navigate, is critical to a successful customer journey. One of the biggest frustrations customers quote in industry surveys is having to repeat themselves over and over again, so we all have a duty to limit that repetition. Gathering income and expenditure data is one of the biggest challenges when it comes to repetition. If a customer has multiple accounts with a supplier who doesn’t have a linked-up system, a customer will sadly go through the process of explaining everything again, not an ideal experience. Next up is the customers’ ability to choose their channel. We know that a significant proportion of identified vulnerable customers choose to service their accounts digitally, so a key consideration is making sure your infrastructure is set up and maintained to enable all systems to ‘talk to each other’, giving customers access to the same information however they choose to get it. The joined-up approach should also allow a customer to start a process on any given channel, whilst having the ability to transfer to an alternative channel, if they choose, and pick up where they left off – with no repetition. Key to that approach though is ensuring your digital offering gives the customer the same functionality whether they call or webchat. Don’t direct them to “fill out a form” or “call to confirm” as that deviates from the customers chosen channel. But what about when that customer has engaged? How do you make sure they feel like they’re in a safe environment, that they’ll understand what they’re being asked and will open up to ensure they’re not agreeing to anything they can’t maintain? It’s crucial to ensure that the right questions are asked, in the right tone and at the right time. It’s common knowledge that vulnerable customers are more likely to agree to something without fully understanding what it means to them, so it’s important to ensure that you’re checking in with the customer throughout your engagement, to make sure they understand what is being asked of them, or what they’re agreeing to do. We all need to probe more, gently of course, but make sure you’re understanding what might impact them. Have you understood their circumstances as well as you could? Have you prompted them to tell you more about their situation? Do they need more external independent advice? The more we encourage open dialogue the better the end-result will be. Financial difficulty for vulnerable customers is stressful enough as it is, so we have to be laser focussed on making it a frictionless process.

A tool for every job
Supporting customers through financial recovery

Published 14 October 2021

Having recently announced the rebrand of the Debtsense suite of products, Aryza is working to develop a new range of solutions, to ensure consumers feel supported throughout the financial recovery and financial restructuring journey. Here, Karen Emmett, Head of Consumer Products at Aryza, examines the functionality of the different products within her portfolio and discusses how they’re already proving invaluable to customers. According to the Office for National Statistics, by December 2020, nearly nine million people had to borrow more money because of the pandemic and the proportion borrowing over £1,000 also increased from 35% to 45% during the final half of the year. Self-employed people were more likely to report reduced working hours and income, even if they had received support from the Self Employment Income Support Scheme (SEISS). People aged under thirty years and those with household incomes under £10,000 were around 35% and 60%, respectively, more likely to be furloughed than the general population. This highlights how large portions of the UK struggled financially last year, many for the first time. We understand that few people feel comfortable discussing their finances, especially if they are struggling or in arrears and we wanted to develop user-friendly alternatives, designed to guide consumers and provide essential support. Aryza Recover digitally takes consumers step by step through their money management journey, explaining their options in an easy to understand format, helping to improve their overall financial wellbeing. By utilising Open Banking data and smart software, the system connects customer accounts, cards, debts, and assets, identifying the most appropriate and helpful offers available, also ensuring that consumers and lenders can access all the information they need via a single system. Once this data is collated, consumers can view the repayment options available to them, and depending on what the affordability check calculates, decide to continue with their existing journey or consider other options such as payment breaks or revised payment plans – eliminating lengthy telephone calls or in branch discussions. Aryza Acquire has been designed with simplicity in mind, offering consumers an alternative to a webform clearly displaying income, outgoing and credit commitments, along with ongoing affordability and vulnerability. The fully customisable software offers assisted journeys, meaning agents can interact remotely within the same interface as the consumer to edit plans, update details and more, making customer support easier and more effective. Rules-based automated decisioning can ensure customers are presented with the most appropriate solution for their individual needs, no matter their financial circumstances. Aryza Engage helps the end-user to save money on bills, and check for any extra benefits they are entitled to, a service that in such challenging financial times is hugely beneficial. Providing consumers with services beyond your core products and educating them towards a healthier financial path is a key aim for many. For those that may be unsuitable for lending, Aryza Decline uses the application information combined with open banking data to provide non-lending options. If you have your own FCA debt advice permissions, we can work …

Not out of the woods yet
Consumers fear longer-term financial recovery

Published 14 October 2021

With the relaxation of lockdown, alongside hospitality and travel industries re-opening over the summer, consumers are less likely to think the pandemic has impacted their household income, according to recent research from global information and insights provider TransUnion. In its Consumer Pulse study, which has been tracking the financial impact of the pandemic, TransUnion found that 25% of consumers believe their household income is currently being negatively impacted, down from 38% in Q1. The most dramatic drop-off can be seen among younger consumers, with just 31% of Millennials and 32% of Gen Z saying their overall household finances have been impacted, down from peaks of 44% and 50% respectively earlier in this year. This improvement, especially among the young, comes as little surprise given the return of major employment sectors such as hospitality, events and travel, bringing about more stable employmentconditions. This in turn has seen significant numbers of employees moved off job-support schemes, and the number of furloughed roles drop down to 1.8m, from a peak of nearly 9m. “Right now, consumer resilience appears to be on the rise when it comes to household finances. However, our research reveals real concerns over the longer-term recovery from the pandemic and there are still pockets of hardship,” said Shail Deep, Chief Product Officer at TransUnion in the UK. The study revealed that the number of consumers who said they were optimistic about the future decreased from 61% in Q2 to 54% this quarter. A likely influence is the fact that one in four (24%) consumers expect their household income to decrease in the future, a proportion which has remained consistent since Q2, despite the summer’s perceived stabilising effect on household finances. Shail Deep continues: “Just under a fifth (18%) of consumers expect to be unable to pay at least one of their current bills and loans in full. And one in three (32%) financially impacted consumers believe they won’t be able to pay personal loan commitments – up from a quarter (25%) in Q1. With this in mind, it’s critical that credit providers have the right insights available to make robust affordability assessments when it comes to new applications, as well as being able to predict future payment behaviour as accurately as possible, using a comprehensive picture of the individual’s financial situation.” One in four (24%) consumers still intend on either applying for new credit or refinancing existing arrangements within the next twelve months, with younger spenders again the most buoyant age group. Over a third (34%) of Millennials and 42% of Gen Z plan on making credit applications, with credit cards remaining an important means of finance for younger demographics, despite the dramatic rise of alternatives such as Buy-Now Pay-Later products. Amongst Gen Z planning to apply, more than one in three (38%) are looking to apply for a new credit card in the next year — an increase from 26% in Q2. Read the report or find out more about TransUnion’s TrueVision trended credit data solution, which can help …

Breaking down barriers
Extending access to credit to fund education

Published 14 October 2021

We are always looking for innovation and to keep members updated on how this might generate opportunities. The CCTA was interested to speak to a new company that is looking to extend access to credit to students seeking to fund their education. ProGrad was co-founded by Marco Logiudice and Ethan Fraenkel, two recent graduates. The idea started when they were both looking to get access to funding for their postgraduate degrees. Marco studied Economics and Finance at Cambridge, while Ethan studied Computer Science at UCL. Prior to starting their postgraduate degrees, both of them had a return offer from a company they had interned at, yet could not find access to funding from most lenders and were forced to borrow money at high cost from different sources. This is why they co-founded ProGrad: to pioneer financial inclusion for students and Gen Z. Students and recent graduates find it challenging to access funding from lenders because of two main reasons, a lack of financial past which makes it difficult to credit score them and a lack of significant income, making it hard to assess whether they can afford credit. This means that currently lenders miss out on an annual £8bn worth of lending across students and Gen Z which translates into a £56bn customer lifetime value. ProGrad explains that they created a twofold solution to tackle these issues, an innovative way to credit score young people through open banking (transactional data) which they say allows them to identify patterns in customers’ spending before scoring them with a probability of default. Secondly, to tackle the affordability problem, ProGrad created a solution to predict with high accuracy the earnings of students up to five years post-graduation. The aim being to give lenders a clear picture of a customer’s risk profile in order to underwrite loans in a better way. ProGrad believes that lenders might be able to win profitable market share through a disruptive technology that identifies younger customers’ future earnings. Established lenders can protect and grow their market share, and challengers can bring a differentiated student lending proposition to market. Through its AI-enabled and explainable credit scoring technology, ProGrad goes beyond simple credit history and provides financial institutions with a clear picture of a younger person’s potential. The use of a unique algorithm incorporating future earnings projections aims to enable lenders to underwrite low-cost, sustainable financing. ProGrad joined the 2021 Techstars programme in London to accelerate their growth. They are part of the NatWest Fintech Accelerator programme and also joined the FCA innovation hub. ProGrad recently secured their pre-seed funding round, raising £620K from various angel investors in the UK. Among them: senior people inside Santander, Man Group, HIG, Bain Capital and other successful angel investors. This funding will enable ProGrad to launch in coming months with lending partnerships they recently closed. ProGrad Stakeholder Article

What politicians should be focusing on at party conference

Published 04 October 2021

This week the Conservative Party Conference is taking place in Manchester. This will bring this year’s major conference season to an end, following the Labour Party Conference in Brighton last week. Both parties seem to be facing big questions about the unity of membership. Keir Starmer’s first conference speech as Labour was well received but there is still a clear division in the party between Corbyn supporters on the left and Starmer’s supporters closer to the central ground. Boris is fighting his own battles. A driver shortage followed by a petrol crisis has meant that he needs to demonstrate that he has a plan to deal with the impact of Brexit and show that it really was worth it. All this comes at a time when there is a sharp focus on family finances and living standards. Times are difficult for many households. The more alarmist papers have drawn comparisons to the 70s and the three-day week, but could there be some truth in their claims as we face energy shortages and higher levels of employment? Brexit combined with the impact of Covid-19 makes for uncertain times. In the last few weeks alone several energy firms have gone bust, and the furlough scheme has come to an end. It has been estimated that a million workers remained on furlough at the end of September. The end of scheme will force tough conversations for employers and the Bank of England is expecting a rise in unemployment. The Government announcement of a new scheme to help families struggling with the cost of living is welcome, but it will only plug the gaps that have been left by the withdrawal of other support. Politicians need to understand that the pandemic has accelerated change in how we live our lives, the labour market has evolved, and so have housing and travel requirements. What does this mean for alternative credit, a sector relied on by those who struggle to borrow elsewhere? The need for this form of borrowing will remain and is likely to grow as more people face variable incomes or uncertainty about their future finances. There is a call from the alternative lending sector to understand how people choose to manage their finances. This market was shrinking before the pandemic hit and we continue to see major players leaving the market due to regulatory challenges. The Government too needs to better understand the impact of the pandemic on the supply and demand of credit. Politicians continue to work on ‘affordable products’ with a pilot of a No Interest Loan Scheme and the expansion of credit unions. In reality millions of pounds of taxpayer money has been spent on trying to grow these alternatives, with very little to show in the way of success. Alternative lending companies exist because of need. They are well placed to help a group of consumers manage their finances to match their individual situations. Now is the time to ensure that access to credit is preserved when the future …

Plans announced for new UK wide No Interest Loan Scheme pilot

Published 07 September 2021

Local and national partners sought to deliver No Interest Loan Scheme pilot with Fair4All Finance, Toynbee Hall and Fair by Design Pilot will test whether this scheme can be scaled to make resources go further to improve financial wellbeing for customers in vulnerable circumstances Millions more people have become financially vulnerable during Covid, requiring urgent support – the pilot will target such individuals Fair4All Finance is teaming up with Toynbee Hall and Fair By Design to deliver a No Interest Loan Scheme (NILS) pilot, the first of its scale across the UK, with £3.8m in funding from HM Treasury and up to £1m of lending capital from each devolved administration, matched in England by Fair4All Finance. The loans will provide a vital financial cushion for people unable to access or afford existing forms of credit, but who can afford to repay small sums, by offering a way to spread essential or emergency costs. The scheme will kick off with proof of concept loans in Autumn 2021, followed by a wider two year pilot in up to six areas of higher deprivation starting in Autumn 2022. Fair4All Finance, Toynbee Hall and Fair By Design will design and deliver the pilot in collaboration with HM Treasury and the governments in Northern Ireland, Scotland and Wales. They will work with credit unions, Community Development Finance Institutions (CDFIs) and other regulated lenders, who will be able to apply to administer the loans through a formal procurement process starting in November. Local councils, housing associations and charities will be encouraged to form partnerships with lenders and provide co-funding to help increase the amount of people the pilot can reach. These partnerships are key to the success of the scheme. The NILS pilot aims to test the benefits to customers, society and the economy and show whether a permanent nationwide NILS can be delivered in a sustainable way. There will be a period of market engagement for the wider pilot over the next few months to gather further feedback on the scheme design and match local partners. Interested organisations are invited to attend two upcoming webinars to find out more: The first webinar on Tuesday 21 September will provide more detail on the pilot and strategy behind it, with a few words from John Glen, Economic Secretary to the Treasury. CLICK HERE TO REGISTER The second webinar on Tuesday 28 September will focus on the wider pilot procurement, contracting, co-funding, pricing and delivery. This will also cover the opportunities to pilot other unrelated products with Fair4All Finance which makes for a much larger scale and duration of contract. CLICK HERE TO REGISTER John Glen, Economic Secretary to the Treasury said: ‘Backed by a £3.8m boost at Budget 2021, our No-Interest Loans Scheme pilot is making good progress and it’s excellent to have Fair4All Finance on board. I now want to see lenders and organisations committed to financial inclusion supporting this innovative new scheme, which could make a vital difference for people right across the UK who …

Stronger together
Member knowledge is our greatest asset

Published 23 July 2021

As we move into the second part of this year, I continue to use this column to provide an update on where we are with some of the changes at the Consumer Credit Trade Association as well the challenges we all face as a sector and how you can help us. You will have seen that the association continues to make changes to the way in which we work. CCTA Magazine has altered and will continue to do so with every edition. Elsewhere, communications are also being improved. Our aim has been to return to three missions that drive the Consumer Credit Trade Association and create true value for the members. The first being our focus on advocacy. The CCTA is determined to create a stronger voice for our members. This has always been at the core of our association. We were established 130 years ago to represent our members, just as the regulation around new forms of credit were being developed. It is just as important that lenders have their say on current laws. Similarly, we have always been a source of information. We want to be a source of insight, much of which comes from discussions with officials, regulators, and politicians. Through new channels of communication, we want you to receive helpful insights at the right time. Third. We want to create a network that is helpful to you. This will allow you to share experiences. Recognising that you are competitors, and these conversations need to be carefully handled. That has been harder with the restrictions of Covid-19, but we hope to get back to CCTA events soon. THERE IS MORE NEED THAN EVER FOR THE CCTA Across our broad membership the experience varies but everyone is surely aware of some of the pressures that exist. For some sectors this comes from the unpredictable impact of Covid-19. Those of you that attended our online Summer Summit will have heard about just two of those many impacts, both the economy and the regulatory expectations. The economic issues are apparent, with the complete lock down of many sectors. One issue that has emerged is the polarisation of financial impact. For some, this has been the most difficult of times, for others it has been a time to pay off debt and build up their savings. You will find many financial predictions but there is a great deal of uncertainty. There is a growing consensus that the Government support schemes may have delayed some of the worst consequences. However, everyone seems to be holding their breath to find out what is going to happen next. In our discussions with the FCA they make clear that this will be high on their agenda and that much of their work will continue to look through the pandemic prism. How could it not be? This will ripple out for years to come. For other firms, especially in high-cost credit, there has been regulatory pressure around issues of affordability and relending. This dates to before …