Another warning to payday lenders about how their regulatory burden has increased, and a confirmation that a response to the payment protection insurance (PPI) claims deadline consultation will be issued before the end of the year are both included in the Annual Report of the Financial Conduct Authority (FCA).
The foreword by chairman John Griffith-Jones speaks of how his organisation has been able to change the regulatory landscape for payday lenders, when he comments:
“By taking a marketwide approach to regulating firms’ conduct we also deliver fundamental changes to the way many sectors, such as payday lending, now operate.”
Here Mr Griffith-Jones is likely to have in mind the new rules on affordability and credit checking payday lenders must follow, and the caps on the levels of interest they can charge.
His report also reminded firms that although the country voted to leave, the UK is still a member of the European Union (EU) at the present time. Firms therefore need to continue to comply with all regulatory obligations that are derived from EU legislation, and to continue to prepare as before for the introduction of forthcoming EU regulations and directives.
Like Mr Griffith-Jones, outgoing chief executive Tracey McDermott makes mention of the Senior Managers & Certification Regime in her statement. Ms McDermott says this new Regime “seeks to deliver a step change in individual accountability.” It was introduced in the banking sector in 2016 and will apply to the entire financial services industry from 2018, and imposes new requirements on firms to ensure that individuals in senior positions are fit and proper.
Ms McDermott then turned her attention to the FCA’s enforcement activities for the 12 months to March 31 2016. She said that:
“We have continued to take tough action where required – imposing penalties of £884.6 million on firms and individuals, banning 24 individuals and seeing jail sentences totalling 32 years and nine months’ imprisonment handed down to individuals we have prosecuted.”
She also said that the FCA had forced 23 firms to set up redress schemes to compensate customers during the year, delivering a total of £334 million in compensation for customers. 134 firms were required to amend or withdraw financial promotions after the regulator’s intervention.
Regarding PPI, the report highlights that during the 12 month period, the FCA imposed its largest fine to date for retail banking failings, when it fined Lloyds Banking Group £117 million for failing to handle PPI complaints fairly. Regarding the possible introduction of a deadline on when a PPI complaint can be made, the report says:
“Our consultation closed in February 2016. As we anticipated, we received a high volume of responses from a wide range of stakeholders. We are considering these and undertaking additional research. We will publish our findings and set out next steps in 2016.”
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