Keeping up with the CONC
There’s nothing like a good book to help you let your imagination run free and be transported to a whole new world. Unfortunately, the FCA’s CONC guidelines could not be described in any way, shape or form as a good book. It is, however, a necessary one and I’ve spent the past two weeks digesting the changes within Policy Statement 15/23 to assess the practical differences it will make to the handbook.
Although I would, of course, always urge you to keep up to date with FCA regulation – and regulatory change in particular – in full yourself, I have given a brief overview to the changes surrounding lending issues, specifically guarantor lending, below:
There was considerable feedback on the FCA’s initial proposals regarding guarantor lending. A number of concerns were raised by respondents which have made the FCA reconsider aspects of the proposals, namely:
- The FCA accept that the provisions should be limited to guarantors who are ‘individuals’ and to agreements under which borrowers are also ‘individuals’. A guarantor will be treated as a ‘customer’ and the FCA believe that, in order for the principles of treating customers fairly (TCF) to be properly observed, they need to be applied to both borrower and guarantor.
- Whilst the FCA has clarified that the ‘creditworthiness’ checks may be different for guarantors than they are for borrowers, it is yet to give any further details of what these checks may comprise.
- There is to be provision of an explanation of the circumstances in which the guarantee or indemnity may be called upon. This may be part of any independent legal advice to the guarantor, provided by a credit broker or by the lender themselves. However, the lender is responsible overall for the adequacy of the explanation. This is covered in more detail in CONC 4.2.2.2R.
I know that at times it can feel impossible to keep up date with ever-changing regulation. One of the many advantages of working with a company with many years of experience of dealing with the FCA, like the Consumer Credit Centre which is part of the SimplyBiz Group, is that we can help to make it more manageable.
If you have any questions on the information in this article, or any other area of regulation or compliance support, please don’t hesitate to get in touch with the Consumer Credit Centre team on 01484 443424. We help firms manage their responsibilities under the FCA and our Ongoing Compliance Service is available to AOBP members at a discounted rate of just £40+VAT per month.
David Golder
Managing Director
Consumer Credit Centre
SimplyBiz Group