Get up to date with the latest issue of InCredit: FCA BoE responds to Treasury's call for evidence on cash and digital payments in the new economy, Payment Protection Insurance, ECB and EBA oppose LGD data waivers for non-performing loans and more...

UK

BoE responds to Treasury's call for evidence on cash and digital payments in the new economy

The Bank of England (BoE) has published a response to HM Treasury's Call for Evidence on Cash and Digital Payments in the New Economy, which was launched on 13 March 2018. The BoE acknowledges that the usage of cash is evolving, but it says that there is, and is likely to remain for the foreseeable future, a significant public demand for banknotes.

BoE, 1 June 2018

FCA proposals on High Cost Credit

As part of its wider review into retail banking, and following an in-depth review into the high-cost credit market, the Financial Conduct Authority (FCA) is consulting on new proposals to benefit high-cost credit users. The FCA's proposals centre on rent-to-own, home-collected credit and catalogue credit & store cards. Addleshaw Goddard has produced an analysis for clients on the impact of these proposals. The closing dates for the consultation responses is 31 August 2018 with two questions having an earlier cut-off of 13 July 2018.

FCA, 31 May 2018

FCA proposals on Overdrafts

At the same time the FCA has issued its proposals in relation to the changes it proposes to make to banks providing overdrafts. Addleshaw Goddard has produced an analysis for clients on the impacts of these proposals. The closing dates for the consultation responses is 31 August 2018.

FCA, 31 May 2018

FCA proposals on regulation of Claims Management Companies

The FCA has issued a consultation paper along with 162 pages of new rules. The FCA will take over the regulation of claims management companies from the Claims Management Regulator on 1 April 2019.  At the same time CMCs based in Scotland will be regulated for the first time. The FCA proposes a stringent regulatory regime which could mean that fewer CMCs remain authorised. At present the CMR regulates 6804 CMCs.  The closing date for consultation is 3 August 2018.  The FCA proposes the new rules will apply equally to CMCs who focus on claims under section 75 of the Consumer Credit Act 1974.

FCA 5 June 2018

Payment Protection Insurance

The FCA has issued statistics on how its publicity campaign in relation to the August 2019 cut-off date for making a complaint to firms is progressing. Its website has had 5.7 million visits but only 26,445 people have rang its helpline. The Supreme Court will hear a Scottish appeal relating to PPI on 3 July 2018. The Court of Appeal in England in Green v Wright ruled that a PPI windfall discovered after an IVA had completed belonged to the IVA supervisor and not to the debtor. The same issue arose in Scotland in Dooneen Limited t/a McGuiness Associates with both Scottish courts ruling that a later discovered PPI windfall belongs to the insolvency practitioner so (s)he can distribute it to creditors and it does not belong to the debtor. 

FCA 6 June 2018

Court approves HSBC plan to ring fence £200bn arm

HSBC has been given the green light by Sir Geoffrey Vos, chancellor of the High Court in London, to move approximately 12m retail customers from HSBC Bank PLC to the new ring-fenced division known as HSBC UK Bank PLC. These customers represent around £120bn ($160bn) of the banking group’s overall deposits.

1 June 2018

Dormant Assets Scheme bolstered by industry leaders

Four business heavyweights have been chosen to expand the dormant assets scheme across their respective sectors. The industry champions will work with the banking, securities, pensions, insurance, wealth management and investment sectors to increase the amount of dormant funds that can be released for good causes. They will also bolster efforts to reunite customers with assets from bank accounts that have been untouched for more than 15 years.

HMRC, 3 June 2018

BIS publishes CGFS/FSB joint report on FinTech credit

A working group established by the Committee on the Global Financial System (CGFS) and the Financial Stability Board (FSB) has published a report which considers the implications for financial stability should FinTech credit grow to account for a significant share of overall credit.

BIS, 30 May 2018

Unfair relationship case

Lord Justice David Richards will hear on 14 June 2018 in the Court of Appeal an application for permission to appeal made by Mark Holyoak. On 23 December 2017 Mr Justice Nugee dismissed all claims made against the property developers Nick & Christian Candy. The judge ruled that in spite of the evidence of intimidation that there was not an 'unfair relationship' under section 140A of the CCA 1974. 

Worldwide 

ECB and EBA oppose LGD data waivers for non-performing loans

The European Central Bank (ECB) and the European Banking Authority (EBA) have written a joint letter to EU legislators in which they express concern regarding proposals by some stakeholders to allow losses arising from the sale of non-performing loans (NPLs) to be eliminated from the dataset used for loss given default (LGD) estimation by the banks selling the NPLs. Introduction of the data waiver would result in underestimation of LGD and inadequate capital requirements, they warn.

ECB, 1 June 2018

European Parliament’s provisional text of resolution on sustainable finance

The European Parliament has published the provisional version of a text adopted on sustainable finance, and instructed its President to forward the resolution to the Council and the Commission. The resolution stresses the need for a faster sustainable transition as an opportunity for orienting capital markets and financial intermediaries towards long-term, innovative, socially friendly, environmentally sound and efficient investments.

European Parliament, 30 May 2018