Included in this weeks edition of InCredit: FCA announces proposals to fundamentally reform the way banks charge for overdrafts and extends protections for other high-cost credit products; FCA publishes final report on retail banking business models and more...


UK

FCA announces proposals to fundamentally reform the way banks charge for overdrafts and extends protections for other high-cost credit products

The FCA has today announced the next package of measures forming part of its high-cost credit review. It has announced proposals to change how banks charge for overdrafts, which would bring to an end to banks charging higher prices for unarranged overdrafts. The FCA has also made new rules strengthening the protections for consumers using home-collected credit (doorstep lending), catalogue credit and store cards and it is consulting on further measures on buy now pay later offers.

FCA, 18 December 2018

FCA publishes final report on retail banking business models

The FCA has published the results of its review into the retail banking market following on from its Progress Report in June 2018. The FCA's final report extends its analysis beyond current accounts (PCA) and informs its view of emerging scenarios in retail banking and their impact on consumers. It is founded on business model analysis of around 40 firms active in retail banking. In this paper the FCA examines the impact of branch closures, provides an update on its distributional analysis of PCAs, and analyses the profile of customers who switch PCA provider.

FCA, 17 December 2018

FCA introduces new rules on handling complaints about Authorised Push Payment fraud

The FCA published new rules allowing victims of Authorised Push Payment (APP) fraud to complain to the payment services provider (PSP) receiving their payment. In the case of APP fraud, the PSP is often a bank which holds the accounts of either the victim or fraudster. Currently, the sending PSP, but not the receiving PSP, must handle these complaints in line with existing complaints handling rules in the FCA Handbook. These obligations have now been extended to the receiving PSP and victims can refer their complaints to the Financial Ombudsman Service if they are unhappy with the outcome. The new rules will come into force on 31 January 2019.

FCA 14 December 2018

FCA publishes Handbook Notice No. 61

The FCA has published Handbook Notice No. 61, which includes changes to the FCA Handbook made by the FCA board on 15 November and 13 December 2018, as well as changes to the Handbook made by the Board of the Financial Ombudsman Service (FOS) on 7 December 2018 and approved by the FCA board on 13 December 2018. The Handbook Notice also includes feedback on consultation papers (CPs) that will not have a separate policy statement (PS).

FCA, 16 December 2018

UK Finance: digitisation of financial services has the potential to increase financial inclusion

Their new report Financial Inclusion in a Digital Age explores how digital and a collaborative approach to understanding consumer benefits can help to attain and deliver an enhanced vision of inclusive customer journeys and outcomes, in both the short, medium and long-term.

UK Finance, 14 December 2018

The systemic risk buffer: Updates to the Statement of Policy

The PRA has published Policy Statement 32/18 ‘The system risk buffer: Updates to the Statement of Policy’. This statement of policy (SoP) sets out the PRA's approach to the implementation of the systemic risk buffer (SRB). In line with the Independent Commission on Banking (ICB) recommendations, the UK legislation implementing the SRB requires the Financial Policy Committee (FPC) to establish a framework for an SRB that applies to large building societies and ring-fenced bodies (RFBs). The SRB Regulations require the PRA to apply the framework set out by the FPC on the SRB from 1 January 2019.

PRA, 14 December 2018

FCA and PRA changes to mortgage reporting requirements

The FCA and the PRA have proposed new reporting requirements that would apply to mortgage lenders and home finance administrators. The FCA and the PRA have identified a number of areas where they believe further data are needed from firms. This consultation paper (CP18/41) seeks to address those gaps by setting out proposals to increase the data which mortgage lenders and administrators are required to submit via Product Sales Data (PSD) and Mortgage Lending and Administration Return (MLAR). Feedback is due by 22 March 2019.

FCA, 13 December 2018

FCA updates firms on preparing for Brexit

The FCA have published further information on how firms may be affected by Brexit by building on information it has  already made available to firms. This will help firms to consider the implications for their business and their customers, and to plan accordingly.

FCA, 13 December 2018

FCA publishes occasional paper on social media advertising

The FCA had earlier published guidance on social media advertising in 2015, which reminded firms that any form of communication (including character-restricted social media adverts) are capable of being a financial promotion, and are therefore required to contain certain information, including any necessary risk warnings. Given the increasing importance of social media, it is important that the FCA understands the impact of its rules in this area. The FCA has therefore published the Occasional Paper- "Blackbird’s alarm call or nightingale’s lullaby? The effect of tweet risk warnings on attractiveness, search, and understanding" where it tests several design features of character limited risk warnings, as well as how standalone compliance affects consumers’ judgements across 10 products.

FCA 13 December 2018

FCA has published Guidance on financial crime systems and controls: insider dealing and market manipulation (FG18/5) and renames and updates the Financial Crime Guide

This Guidance explains  the changes the FCA has made to the Financial Crime Guide following its March 2018 consultation. The updates include material on customer due diligence (CDD) and enhanced customer due diligence (EDD) which align FCG with the requirements of the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017, SI 2017/692 (2017 MLRs).

FCA, 13 December 2018

Worldwide

Non-performing loans: Economic affairs committee backs EU rules for coverage of expected losses

The European Parliament's Committee on Economic and Monetary Affairs (ECON) has adopted its report on the European Commission's proposal for a regulation amending the Capital Requirements Regulation (Regulation (EU) 575/2013) as regards minimum loss coverage for non-performing loans (NPLs). ECON has recommended a number of changes to the proposal.

ECON, 6 December 2018

Distance Marketing of Financial Services – evaluation of EU rules

The European Commission has launched an evaluation of the Distance Marketing of Financial Services Directive (Directive 2002/65/EC). The evaluation will assess whether the Directive is relevant, effective, efficient and in line with other EU legislation. The deadline for feedback is 4 January 2019.

European Commission, 7 December 2018

EBA publishes final Guidelines on disclosure of non-performing and forborne exposures

The European Banking Authority (EBA) has published its final Guidelines on disclosure of non- performing and forborne exposures. The disclosure will allow market participants and stakeholders to have a better picture of the quality of the banks’ assets, the main features of their non-performing and forborne exposures, and in the case of more troubled banks, the distribution of the problematic assets and the value of the collateral backing those assets.

EBA, 17 December 2018

Key contacts

Amanda Hulme

Amanda Hulme

Partner, Head of Financial Regulation
London

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Lorna Finlayson

Lorna Finlayson

Partner, Financial Regulation
Edinburgh

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