CEO COMMENTARY: Salary Finance- unregulated payday loans in disguise?

Published 21 January 2021

Salary finance, or advance, schemes seem to have grown rapidly in recent times. These schemes allow employees to access their salary early on the grounds that this will enable them to better manage their finances. Major employers, along with many well-known hospitality brands, have signed up to a range of salary finance schemes and early access to pay continues to grow in popularity. These products sit outside of FCA regulation currently, and seemingly trying to avoid future restrictions, many companies that offer early access to pay are keen to point out that it is not ‘credit’. Salary finance schemes were included within the scope of the recent Woolard Review, most of the attention about unregulated products focused on the ‘buy-now pay-later’ market, a focus reinforced by recent negative media coverage. As we await the Woolard Review’s findings, we believe there is significant risk to consumers from salary finance. Customers who use salary advance schemes need to be protected in a similar way to customers who use consumer credit. Salary finance providers often position themselves as the cheaper alternative to high-cost credit and claim to focus on the financial wellbeing of employees. In reality, these schemes appear low cost because there is almost no risk of an advance not being repaid. We have concerns around the potential for customer harm that could come from using these products. Customers have less protection in comparison to regulated products and carry all the risk. Limited or non-existent affordability checks, and the fact that use of a salary advance is not obvious when regulated lenders check whether a customer can afford a loan creates problems. It means that customers could quickly find themselves overburdened, given credit they cannot afford to repay, in a situation that is very difficult to get out of. Advances are often repaid via a single payment following the next payday. Unlike regulated lenders, most salary advance schemes do not check whether the employee can afford this without borrowing again. This creates a risk of employees relying on repeated advances to survive and meet their financial commitments. Individuals may also be tempted to borrow more than they can afford to repay and become trapped in a spiral of debt. For employees who do encounter difficulty, there is no requirement for employers or advance providers to refer individuals for debt advice, or other help, if they are unable to manage their money after using salary advances. With salary finance, campaigners are advocating for an unregulated product, that avoids affordability checks, does not offer forbearance, or give primacy to priority debts. While there were concerns about payday lenders using continuous payment authority (CPA) to take repayments, this is CPA ‘on steroids’ as the money does not even reach the bank before it is repaid. It is a retrograde step to replace a regulated product with one that is unregulated. The current growth of these products outside the regulatory perimeter illustrates the need for the regulatory framework to be able to move quickly, adapting to …

CEO UPDATE: One week in – big challenges and our first steps

Published 13 January 2021

Now into my first full week as I started my new role as Chief Executive at the CCTA, I have been taking the first few steps towards implementing the new strategy that we have agreed with the Council. Having been part of the alternative lending sector for a number of years, I can see common issues affecting many lenders and how we can help with some of the challenges they now face. I am delighted that CCTA has committed to play a part in ensuring that responsible lending will be there as we come out of these extraordinary times. It is undoubtedly a tough time for the sector. Taking a minute to look back on the first week in my new role, I was not surprised to see data from the FCA showing thousands of firms are at risk of collapse due to the impact of the Covid-19 pandemic. Our own industry numbers show a dramatic drop in lending when you compare 2019 to a similar period in 2020. There is a real threat that companies will go under, especially SMEs that do not have the deep pockets of the banks. This will undoubtedly have a negative impact on our customers as the supply of credit would fall further. When this happens, we know the need for credit is still there so consumers look elsewhere, often to less desirable alternatives. All this underlines the fact that access to alternative credit needs to be maintained, particularly at a time when mainstream lenders will likely seek to avoid risk in uncertain times and tighten their lending criteria. Customers need to be able to access a range of safe, competitive products. Credit will play a part in us getting back on our feet, getting back to work and juggling our finances. I want CCTA to be the home for these alternative lenders, allowing us to create a stronger voice for the sector. There are significant regulatory challenges that remain, along with the impact of the pandemic. We need to continue to engage with our external stakeholders on these issues and help them to understand why the sector is vital to the consumers that use it. Jason Wassell CCTA CEO

LETTER TO ECONOMIC SECRETARY: Consumer Credit Act – A case for reform

Published 03 December 2020

John Glen MP Economic Secretary to the Treasury HM Treasury 1 Horse Guards Road London, SW1A 2HQ Dear Economic Secretary CONSUMER CREDIT ACT – THE CASE FOR REFORM Our trade associations represent a wide range of specialist lending companies across the lending and leasing sector. Modernisation of the Consumer Credit Act (CCA) is urgently needed to simplify procedures to support customers in financial difficulty, notably those impacted by Covid-19, and facilitate access to credit via digital means and to new products, such as low-emission vehicles. The attached proposals have been developed in collaboration with specialist consumer credit lawyers to identify the areas of the CCA most urgently requiring change. They are not intended to dilute consumer protections rather they would simplify the regulatory architecture to ensure it is more flexible and enhance rights in some instances, for example, by aligning the rights for subscription-based finance with those for more traditional products. The FCA review of the CCA which reported to HM Treasury in 2019 provides a solid basis for extensive reform. It is important that its findings are acted upon before they go out of date. The Government has a golden opportunity over the term of this Parliament to create a forward-looking dynamic regulatory framework in a market covering two-thirds of all FCA-regulated firms. The FCA has the expertise to conduct this exercise in collaboration with you and your officials and we would be willing to provide additional resource as appropriate to support this important work. We have shared the paper with consumer representatives who agree that improvements need to be made to the Act, particularly in respect of the treatment of customers in financial difficulty. We are certain that we can find common ground in other areas. As a next step, we would like to invite you to a virtual roundtable discussion (which we will organise) with industry trade bodies and consumer representatives. We would extend this to relevant HMT and FCA officials. Yours sincerely

OVERVIEW: Consumer Credit Act – A case for reform

Published 03 December 2020

The Association of Alternative Business Finance (AABF), the British Vehicle Rental & Leasing Association (BVRLA), Consumer Credit Trade Association (CCTA) and the Finance & Leasing Association (FLA) represent lenders and leasing companies across the UK. Modernisation of the Consumer Credit Act (CCA) is pressing to simplify procedures to support customers in financial difficulty and address other impediments to a forward-looking consumer credit market. We have developed proposals with the support of legal experts to identify the areas of the CCA most urgently requiring change. EXECUTIVE SUMMARY • The Consumer Credit Act (CCA) is approaching its fiftieth anniversary but some of its core provisions date back to the 1960s. Reform is therefore long overdue. • We propose a simplification of consumer credit landscape via a twin-track approach of the Financial Services and Markets Act (FSMA) and Financial Conduct Authority (FCA) rules to enhance existing consumer protection as they will be able to be applied in a more responsive and flexible manner, for example, when customers need urgent support. • It will facilitate the delivery of innovation, for example the funding of low emission vehicles, and new market entrants to offer more consumer choice. • The Government has made the case for reviewing the financial services regulatory framework (in its consultation on the post-Brexit landscape) and our recommendations build on its proposals. • We propose a series of roundtable discussions at which industry trade bodies, consumer representatives would map out with HMT and FCA officials a detailed plan for CCA reform. OVERVIEW The current regulatory framework governing consumer credit for over 40,000 firms is complex and ill-suited to the way in which today’s households borrow to smooth their finances or SMEs lease equipment to grow their businesses. We favour a simpler approach which starts from the premise that nothing is required to be retained in a specific piece of legislation, namely the Consumer Credit Act (CCA). We need to consider what regulatory and legal protections are needed today (which may mean retaining similar protections to those in the CCA, including S75 rights, and enhancing them in other areas) and then legislate in a way which removes duplication, fosters flexibility and is done in a proportionate manner. The FCA’s very comprehensive review of the CCA (presented to HM Treasury in 2019) provides a good starting point. It would be possible to replicate the CCA’s provisions in a combination of powers contained in Financial Services and Markets Act (FSMA) and the Financial Conduct Authority (FCA) Consumer Credit sourcebook (CONC). Primary legislation could amend FSMA to create protections to those in the CCA and the FCA could prescribe in CONC when these protections would apply. In this way, the regulators could respond quickly in a targeted and proportionate way to real harm, based on evidence gathered by the FCA. Building on the FCA’s 2019 review of the retained CCA provisions, Information Requirements would, for example, be set out in the rules in CONC, whilst Rights and Protections, including S75 connected liability, and Sanctions, including enforceability …

CCTA Response: The Woolard Review

Published 02 December 2020

FCA Call for Input: Review into change and innovation in the unsecured credit market (The Woolard Review) CCTA welcomes the opportunity to comment on the review into change and innovation in the unsecured credit market. We are concerned that not enough focus has been given to the issue of consumer needs for financial smoothing products, especially with consumers in several socio-economic groupings deemed to be making ends meet, or having more month than money. The old puritanical saying that people should live within their means, is sound advice and should be ‘schooled in’ at an early age. We have long been an advocate of financial education, and supported Credit Action/Money Charity through financial contribution, by certain members funding student money manuals for all new university entrants, and by our CEO being an active Board Member of the charity for a period. We believe that it is a priority that all governments have failed on, because it is difficult to achieve and probably of limited political value. However, the danger, stresses and strains, of not understanding day to day finance is a major issue impacting on personal and family relationships the length and breadth of the UK. All financial services are a risk as life, both personal and business, does not always run smoothly. Disruption and change grow faster in our ever-changing world, impacting on businesses and consumers alike, so occupations and relationships are constantly changing. Credit is therefore, and ever will be a risk market, but a market that is a necessity for the precarious state of the UK economy, and the extreme reliance on consumer spending to underpin UK GDP. Unless there is a seismic shift to massive industry productivity the economy desperately needs the current levels of domestic spend, in fact if there is a bad exit from Brexit consumer lending will need to be substantially higher. If the intent from the regulator was to completely de-risk credit and remove the consumers from the supply side who live on credit and spend more they earn, by vehicles such as, multiple credit cards, it would create distress and anger with the consumer. In fact, there well may be an outcry by constituents to their Member or Parliament that the FCA is deciding social policy which they would assume is for Government. Similarly if the affordability cure was to take millions of consumers out of the use of flexible credit, there would be outrage from both the consumer and politicians in depressed areas, with the so called Conservative northern ‘red wall’ potentially reverting back to Labour. Progress cannot and should not be delayed but the current pace and thrust of regulation will have severe impacts on the access to responsible credit products that the consumers want. Similarly all parties should come together with government and consumers to shape the future before mechanistic, over-regulation, data modelling, and third party data ruin the economy by limiting the supply side. The Competition Commission (CC) inquiry model structure works well in addressing the supply …

CCTA ARTICLE: Greg Stevens CEO – Addressing the issues

Published 24 November 2020

For only a small handful of people has 2020 been a good year, Geoff Bezos and Joe Wicks spring to mind. For most other businesses and individuals, it has been lousy. The retail banks have had mixed blessings. On the one hand, they have taken a hit like everyone else, with a deteriorating economy, less personal and business lending and collections restricted by the Government’s emergency payment deferrals. On the other, they have been able, to an extent, to reverse the narrative that attached to their wholesale arms during the last global crisis (the financial one) in 2008-9, when they were bailed out with public funds for problems they had caused. A TOUGH ENVIRONMENT For consumer credit businesses, the commercial and regulatory environment is as tough as it has ever been. Covid has knocked most businesses for six. In response, the Financial Conduct Authority (FCA) and Financial Ombudsman Service (FOS) are doubling down in their scrutiny of lending and relending decisions, even at risk of shrinking the regulated market. Pre-Covid, it was getting harder for credit businesses to ‘price for risk’. The pandemic and its aftermath will make it even less conscionable to policy makers. A spirit of ‘safetyism’ is pervasive in government, which is bearing down on the ‘risk-reward’ trade-off at the heart of credit deals. This largely accounts for the difficulties businesses are having at FOS. The Ombudsman has the power to dole out retrospective justice on credit deals struck three, four, five years ago, sometimes longer. Given the mood and inclinations inside both government and regulator, this feels like a different era. ‘Good consumer outcomes’ are now sacred, anything short of it is punished regardless of factors beyond a lender’s control. Criticisms of FOS are falling on deaf ears. Government, Regulator and Ombudsman are lock-step in their approach to affordability. CAUSE FOR OPTIMISM So what of 2021? Are there glimpses of sunlit uplands that can give lenders cause for optimism? I suppose the first and fundamental point is there will always be demand for credit, and more so in 2021 than any other year. In the aftermath of Covid, with furlough wound in and unemployment soaring, people will need the smoothing and balancing mechanisms that creditors provide. The sub-prime, non-standard marketplace will grow. But so, inevitably, will personal risk levels. Finances will be tighter, credit records impaired. The million dollar question, therefore, is how can anyone lend into this marketplace and satisfy the regulator’s ‘affordability’ expectations at the same time? The reality is many of the industry’s ‘de-risking’ models have been deemed inadequate. The use of a friend or family-member as guarantor has come under sustained attack. Even home-collected credit, which officials traditionally regarded as a benign model, is being challenged for the frequency of relending patterns in use for over a century. The reality is there is a market there for any businesses that can sufficiently de-risk, but if they can’t, they will struggle. Some challenge. BUSINESS AS USUAL? For government and regulator, 2021 will be …

CCTA COMMENT: FCA – Christopher Woolard to chair review of unsecured credit market regulation

Published 17 September 2020

The below Financial Conduct Authority (FCA) announcement details that Chris Woolard the FCA Interim CEO, until the recent appointment of Nikhil Rathi as the new CEO, will chair a far-reaching review of the unsecured lending market that will have implications for many CCTA members. Woolard has been instrumental in guiding the harsh regulation that takes little notice of the size of loan compared to the risk to the consumer, or the size of the risk to firms if they are hit by bogus claims. We have seen market interference on a grand scale, outside of the Banks, that is now taking away access of responsible credit to many hard-pressed consumers. The pricing for risk model and ensuring that both the consumer and the industry are being treated fairly is being skewed too far towards consumers, to the detriment of the overall non-banking market. The Banks are moving further away from the hard working and hard-pressed consumers, in all socio-economic cohorts. Over the last couple of years credit cut-offs have been raised both in the mortgage and banking sectors. The consumer credit industry that has served the consumer well since the 1970’s is in danger of distortion if the advisory group do not consult widely with consumers on access to credit post Covid-19, the industry on funding, the efficacy of current credit scoring models, rising bogus and unjust complaints from consumers and the CMC’s, and the rising cost of regulation to SME’s. Of major importance to the wider UK economy is household spending which is currently around 66% of GDP, this will rise as a percentage as Covid-19 issues will mean the business spending will be less. After Covid-19 furloughing ceases at the end of October, redundancies will increase significantly, restricting overall household expenditure. Andrew Bailey ex-FCA CEO, now Governor of the Bank of England has already stated that he is willing to inject another £100bn of ‘quantitative easing’ into the economy, let’s all hope that affordability rules are being applied and that our children are not going to suffer in the future. The recent All Party Parliamentary Group (APPG) on Alternative Lending Inquiry Report on access to credit, amongst other issues, is an important subject to get behind as an industry. The CCTA have part funded the work undertaken by the APPG and worked closely with the secretariat to the APPG with regard to the overall agenda. A full report and schedule of past and future CCTA public affairs will be on the website in the next ten days. The ‘ affordability ‘ subject is a major issue, and has been since the Office of Fair Trading, in their wisdom, changed it from ‘ credit worthiness ‘ as it was originally described in the Consumer Credit (EU Directive) Act 2010. The industry will need to have ‘ eyes and ears ‘ on the aforesaid FCA advisory group, as Woolard has a distinct leaning towards the consumer lobby, and we need a strong counter lobby to protect the consumer, not the …

Latest ONS employment figures highlight growing need for short-term credit

Published 16 October 2019

The latest employment figures from the Office of National Statistics published earlier this week, have reported an unexpected increase in the unemployment rate to 3.9% in the June-to-August period after the number of people in work fell by 56,000. The combined effects of a global slowdown, political uncertainty and Brexit have impacted high street retail jobs and the manufacturing sector where a number of redundancies have taken place. As Brexit-related uncertainty has continued, many firms are deferring significant hiring and investment decisions, so a softening of the labour market could well be expected to continue in the short term, at least. As noted by the JCRA, the labour market seemed to have been isolated from the overall weakening of the economy this year, but the steepest fall in employment in over four years shows businesses are getting ready for Brexit by cutting jobs. Combined with reports pointing to consumer spending also now slowing, this may be indicative of more uncertainty in the jobs market and could result in economic output turning negative, as we saw in the second quarter. Even a short period of unemployment can hit a significant number of hard pressed consumers who may need access to responsible credit to see them through a short period of financial upheaval, especially when many are on zero hour contracts or form part of the gig economy. While regulation of credit is required to ensure firms lend responsibly it is important the regulators and politicians alike ensure access to credit is maintained and safeguarded as consumers may have a justifiable need to smooth out occasional erratic incomes. Access to fair and reasonable financial products from regulated lenders who undertake robust affordability checks on borrowers, and operate fair, transparent charges will help support those consumers who are struggling to manage their cash flow or need help to cover emergency, unexpected costs.

Personal finances in the UK have “sunk to all time lows”

Published 03 October 2019

10.5 million Britons are in the worst financial position of their lives New research commissioned by FairMoney.com has revealed that an astounding 10.5 million Britons are in the worst financial position of their lives. The research, entitled ‘Brexit Broke Me’ has also found that over half of Britons (53%) have disposable incomes of less than £0. This is a dire situation for many households as the gap between the ‘haves’ and the ‘have not’s’ is increasingly widening and the aggressive nature of current regulation forces more consumers into financial hardship by default. The outlook for the 9,000 Thomas Cook former employees is especially bleak. These workers are particularly vulnerable as they have been left with no compensation for their loss of jobs. Fair Finance has rightly highlighted that many of these former employees are having to turn to friends and family for cash “in a bid to stave off financial woes.” Sudden income shocks such as this can have a disastrous effect on household finances especially if individuals and families are already financially constrained and do not have access to emergency, responsible credit. It is encouraging that organisations such as Fair Finance are fighting hard for consumers to have freedom of choice from different lenders. As Dr Roger Gewolb, Founder and Executive Chairman of FairMoney.com warns: “In the way that Thomas Cook has unravelled before our eyes, if further collapses of major employers occur, we shall unfortunately see the extent to which Britons are struggling to make ends meet. Personal finances across the UK are being crippled, yet there seems to be very little being done to secure people’s futures… “The…lack of provisions for fair finance….means that people in dire need of small, doorstep loans have reduced accessibility…” As representatives of the short-term credit and wider consumer credit market, we absolutely must continue to campaign to Protect Access to Responsible Credit. There has never been a more urgent time or need to maintain consumer access to responsible credit in order to assist with the peaks and troughs of expenditure and everyday life. CCTA will be at the front and centre of Protect Access to Responsible Credit (PARC) campaigns. Our National Conference on 7th November will be a clarion call to all our Members to get behind the PARC programme and fight for the financial rights of all consumers.

Business as Unusual

Published 28 August 2019

Any belief that the summer holidays and time away would ease the political logjam that is Brexit has floundered before Parliament returns on 3rd September, and with it any reasonable hope that constructive discussions could begin with Government Departments, on the business issues of the day. Suspending Parliament just days after MP’s return to the House, with only a few weeks before the Brexit deadline, serves only a group of Politicians. It also moves us closer to a General Election with a real bugger’s muddle likely, and the possibility of a hotchpotch of a rudderless Coalition Government with a narrow perspective. On the plus side the PM is genuinely raising the mood of the country, and with it the Conservatives in the opinion polls. Over regulation of the consumer credit Industry is already creating a lack of access to responsible credit for many. As the cost of compliance rises, and further unnecessary regulatory tinkering takes place, harsher credit scoring restrictions on availability will come into play, especially for young people and those on low incomes. We therefore applaud the article in the Times yesterday by Robert Jenrick MP, Secretary of State Housing, Communities & Local Government addressing affordable shared home ownership for young people, and those on lower incomes. It is refreshing to see aspiration being recognised as a positive feature of credit, rather than the well trodden route of credit being a millstone around consumers necks. The youth of today is our tomorrow and they should be encouraged to be the best they can be, and to aspire in a world that rewards the knowledgeable and the brave. We sincerely hope that the tide has turned against credit most often being seen as potentially bad for the consumer. We hope that as part of the “ very exciting agenda “ that the PM will outline in the Queen’s on 14th October we will see more funding going into education, including the ‘ lifeskills ‘ arena such as financial education, especially budgeting and money management. There are many charitable organisations that do a sterling job in this area, my grandchildren for example have hugely benefitted from the Student Money Manual provided by The Money Charity in their first year away at University. However they would have benefitted more if the early ground work on understanding money, had been an integral part of the formal school curriculum. One cannot doubt that the PM will be steadfast in his intent to see an end to Brexit, however the ship may well be blown off course, as the Parliamentary factions plan and scheme. If prorogation happens as expected, it will see Parliament closed for 23 working days. During the process of prorogation, no debates or votes are held. Most laws that haven’t completed their passage through Parliament die a death. There will be many twists and turns over the next few months, with the possibility of a poor outcome for business, and Consumer Credit industry in particular. The CCTA is increasing it’s Public …

Credit Strategy: It’s a sea of uncertainty for SME’s and consumer credit firms

Published 09 August 2019

Written for, and published by Credit Strategy – JULY 2019 GO TO WEBSITE + Just when we thought the uncertain environment within which we operate could get no more opaque, we’re met with further changes from FOS and indeed, a question on the competence of the FCA. When the FCA’s Chief Executive Andrew Bailey and Chair, Charles Randell appeared in front of the Treasury Select Committee to present a biannual report on the work of the FCA they were greeted with a question from its’ Chair, Nicky Morgan asking if “anyone at the FCA read the papers?” If that didn’t make Bailey wince, he was then questioned on why the City regulator didn’t act sooner after a press article reported on Neil Woodford’s use of Guernsey’s stock exchange to avoid breaching fund rules on unquoted stocks. Also last month, more than a dozen MP’s called for Mr Bailey to resign following the collapse of mini-bond holder London Capital & Finance, which went into administration in January owing more than £230m. Despite this, Mr Bailey went on to tell the TSC that the FCA were “taking seriously” the option of extending their perimeter to help mortgage prisoners by regulating unauthorised and inactive lenders. Mortgage lending is generally regulated but borrowers can find themselves stuck with an unregulated lender if their loan becomes sold on as part of a loan book sale. His remarks come hot on the heels of the FCA’s first annual report on the perimeter which was published last week and sets out: · what the FCA does and doesn’t regulate · what challenges the perimeter presents and the actions the FCA is taking to overcome them · what this means for consumers · whether there are any issues with the perimeter which might require legislative or other changes. The report resulted from a recognition that the current perimeter boundary is continuously tested by firms and activities who do or don’t require regulation and that some such firms have caused serious consumer harm and reduced trust in regulated financial services markets. One such example is the claims industry with some claims management companies looking to be regulated by the Solicitors Regulation Authority (SRA), instead of by the FCA. Consequently the two regulators are working together to “keep a level playing field and prevent CMCs arbitraging regulatory requirements” and have agreed a specific Memorandum of Understanding on supervising CMCs. This will be welcome news to the many consumer credit firms blighted by spurious claims from CMC’s looking for new opportunities as the PPI deadline looms. The CCTA has repeatedly warned about claims companies who have corralled consumers into pursuing compensation and excessive and vexatious demands since August last year following the collapse of Wonga and the effect it has on market exit within the industry. Just last month, This is Money revealed the latest affected lender – The Money Shop – reported to have ceased trading due to the ‘unprecedented number of customer complaints”. So,it is with some optimism that …

CCTA responds to the FCA’s Alternatives to High cost Credit Report

Published 26 July 2019

This week, the FCA published a report on the alternatives to high-cost credit (HCC) and set out the actions and recommendations to improve the availability and awareness of those seeking an alternative to HCC. The report also notes that ‘the consideration of access to alternatives to high cost credit will become an integral part of the FCA’s overall work in the credit sector, reflecting the part alternatives can play in improving consumer outcomes.’ Yet, while the FCA’s intentions are understandably well meant, a scan of the publication suggests little more than a sprinkling of motherhood and apple pie, and questionable aspirations for solving access to affordable credit for consumers who are temporarily financially struggling The report recognises that there are 3 million people use HCC in the UK, often driven by unexpected expenses including the need for essential household goods either when moving house or after breakages. The growth in gig economy workers is also a factor in demand for HCC, and the years of austerity have seen the ‘just about managing’ consumers squeezed even further. Of all the alternatives to HCC, it is the credit union sector which is the most lauded despite being polarised between a small number of large credit unions, and many smaller credit unions. There are over 400 credit unions making loans to over 1.8 million members across the UK and credit unions are lending around £1.5bn to their members. The FCA admits that ‘in the short term at least, the capacity of credit unions to make credit available to a significant portion of HCC users is limited, although the larger credit unions have shown that there is scope for growth without the need for any legislative change. Credit Unions face several challenges which includes the viability of offering credit at 3% interest per month to higher risk consumers, a reliance on branch presence and a restrictive legislative framework when trying to broaden the product range. Yet the report also considers alternatives such as Community Development Finance Institutions, an option to combine credit and household goods such as credit unions partnering with a supplier of furniture or household goods, budgeting government loans and grants for essential household goods. The FCA provides a number of recommendations for improving the market to HCC and increasing consumer awareness. It did consider asking regulated firms to signpost consumers to lower-cost credit when rejecting loan applications but rejected this as the consumer may not be lent to by the alternative provider and it would require lenders to understand each other’s criteria more than can be reasonably expected. However while the regulator can make some changes within its own environment such as extending the exemption from its own fees for CDFIs from April 2019 onwards and providing support to RSLs help them obtain credit broking authorisation it is clear that the FCA views the provision of alternative providers as a collaborative effort and works with several others including the Money and Pensions Service, End High Cost Credit Alliance and Fair4All Finance. …