ABCUL welcomes FCA High-Cost Credit Review report
01 Jun 18
Thursday 31 May saw the Financial Conduct Authority (FCA) publish the outcome of its review of high cost credit and consultations on areas of intervention that they propose following the review.
By and large, the review has concluded that action is required to mitigate consumer detriment in all of the markets reviewed. Some of this action, however, is subject to further review and reflection – particularly in designing a cap for rent to own stores like Brighthouse and any action on unarranged overdrafts.
The review also looked at ways in which alternative more affordable providers of such credit could be supported to expand. Action is proposed in terms of improving access to credit data, providing guidance to partners such as housing associations on what does and does not constitute credit broking, encouraging capital investment in credit unions and seeking reform to the Credit Unions Act.
Commenting on the publication, ABCUL Head of Policy & Communications, Matt Bland, said: “We welcome the proposals published today in terms of the extension of protections to different high cost credit markets beyond payday lending. Credit unions up and down the country are actively mopping up the mess caused by these lenders and seeking to offer a responsible alternative and any moves to clamp down on their worst excesses is beneficial.
“We are also very pleased to see the section on FCA action to support the expansion of alternatives such as credit unions. The measures proposed will make a difference to credit unions doing the hard work of offering a reasonably-priced alternative to those with limited options. We’re particularly excited by the ongoing discussions which FCA are taking part in around new investment in financial inclusion initiatives and the prospect of FCA supporting a review if credit union legislation which we believe could unlock significant growth in the sector.”