Regulation round-up
The latest FCA round-up provides valuable insight into the areas in which the regulator is focussing its attention over the coming months.
To provide a flavour of what you should expect, we've taken three key areas that may affect firms offering credit and finance to their customers.
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Enforcement actions
The FCA's Threshold Conditions Team (TCT) has taken action against firms that have failed to comply with the regulator's basic standards.
Unfortunately a number of the firms on the receiving end of this action have come from the consumer credit sector. While many consumer credit firms have successfully adopted the regulatory standards of the FCA, the level of cancellations reveals that some are still falling short.
In 2017 so far, the TCT cancelled the authorisation of 207 firms for such failings.
Credit worthiness: Consultation paper
With the release of the FCA's consultation paper on credit worthiness, we now have a clearer idea of the areas in which the regulator is seeking improvements.
The rent-to-own sector in particular has come to the FCA's attention, while motor finance is another area in which the FCA is to consult to develop its understanding of the market.
The credit worthiness consultation will run for a period of three months.
Incentives
The Consultation Paper details how firms should act when designing pay and reward structures for their staff. The regulator's particular concern is that firms manage any potential harm to consumers.
The FCA is consulting on updated rules and guidance to help firms identify and manage risks after discovering inadequate controls in recent thematic work. In some cases, firms had failed to recognise how their incentives and bonus schemes could potentially harm customers.