trending Market Intelligence /marketintelligence/en/news-insights/trending/pczj6z3h5tn-_0-rp93s_w2 content esgSubNav
In This List

UK regulator flags areas of concern in high-cost credit market

Podcast

Street Talk Episode 87

Blog

A New Dawn for European Bank M&A Top 5 Trends

Blog

Insight Weekly: US banks' loan growth; record share buybacks; utility M&A outlook

Blog

Banking Essentials Newsletter 2021: December Edition


UK regulator flags areas of concern in high-cost credit market

The U.K. Financial Conduct Authority said it is prepared to propose new rules to protect consumers from high-cost credit companies after it identified key areas of concern in some areas of the market, including overdrafts, rent-to-own, home-collected credit and catalogue credit.

The FCA said its review of the market since July 2017 showed "an emerging picture of the case for intervention in a number of markets but also some limitation on what can be achieved purely through traditional regulatory interventions."

The regulator said it is prepared to set out new rules to address areas in the sector that are not working well with consumers, and will look at solutions to give consumers more options and to increase the availability of alternatives to high-cost credit, among other measures.

"The FCA considers that it is important to avoid negative unintended consequences from taking steps that might restrict the availability of credit to those consumers who are able to repay it affordably," it said.

The regulator intends to publish its findings and proposals for consultation later in the spring.

The FCA added that it remains concerned about the high fees and charges for unarranged overdrafts, especially when compared to the relatively small amounts lent. The regulator said it will continue its work into overdrafts alongside its strategic review of retail banking business models, which it intends to finalize in mid-2018.