We are currently reviewing the FCA Strategy to determine its implications for our members. That is being considered alongside the FCA’s proposed regulatory fees and levies.

Too often regulators set rules that work well for the big banks and mega insurance companies. The FCA often fails to recognise the important part played by smaller firms and that increasing regulatory burden needs to be considered.

There has been a decline in UK-regulated credit for many as lenders exit.

The CCTA has been pointing to the decline in regulated credit as more alternative lenders leave the market. These are lenders that are not easily replaced so families across the UK have fewer options when it comes to credit.

The Centre for Social Justice has highlighted the growth of illegal lending in the UK.

They travelled the breadth of the country to understand where and how illegal lending takes place; commissioned polling of over 8,000 UK adults; compiled and analysed the largest sample of known victims to date; and heard first-hand the powerful stories of those exploited, often by ‘friends’ who turn out to not be friends at all.

More than a million people using illegal lenders in the UK

In England today, they estimate that as many as 1.08 million people could be borrowing from an illegal money lender.

We believe this is the first independent evidence that shows loan sharks circling as we see regulated supply drop away.

There are those that try and create an equivalency, between non-prime and illegal lending. However, there is a chasm in terms of the protections provided by regulated lenders and the threats that often come from organised crime involved in illegal lending.

Anyone finding themselves in trouble with an FCA-regulated firm knows that they can rely on consumer protection rules. Ultimately they can turn to the Financial Ombudsman or the courts. Those borrowing from illegal lenders have no such comfort and can become embroiled in further criminal activity.

The CCTA will be reporting back on the increasing regulatory burden and other issues at the upcoming Summit on 26^th April 2023.  If you are a member, then sign up.

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