ABCUL Comments on further FCA high-cost credit measures
21 Dec 18
This week saw the FCA publish a raft of further proposals and measures as part of their high-cost credit review. These involved new guidance for home collected credit, guidance on credit broking for RSLs, proposals for Buy Now Pay Later stores and, most radical of all, interventions in the bank overdraft market.
Commenting on the announcements, ABCUL Head of Policy and Communications, Matt Bland, said: “ABCUL and our members continue to welcome and support the steps the FCA is taking to address some of the worst practices and consumer detriment in the high-cost credit market. For many years the standards in these markets have been too low and credit unions up and down the country know all too well the damage this has done to thousands of peoples’ lives. Credit unions are often the ones trying to help these families pick up the pieces and get their finances back on track.
“The guidance for RSLs on credit broking leaves something to be desired as it begs many questions about the myriad different ways in which housing associations and credit unions work together to provide awareness of the credit union as an affordable alternative. It remains unclear where RSLs stand in relation to the general promotion of a specific credit union – as opposed to general awareness of credit unions and specific referrals for specific individuals – but we hope the Government’s plans to legislate in this area provide an opportunity to achieve full clarity.
“Finally the measures proposed in the overdraft market are far-reaching and radical and the FCA should be commended for its ambition here. The fact that such a small proportion of vulnerable consumers currently provide such a large amount of overdraft revenue is something which cannot be fair. Credit unions that provide current accounts have always sought a fairer way to fund their service through transparent, up-front fees and so we support the principles behind the FCA’s approach.”