On 25 March 2019, the Financial Conduct Authority (“FCA”) published its Final Report following its review of the retained provisions of the Consumer Credit Act 1974 (“CCA”). The Final Report follows the Interim Report published in summer last year (see Gough Square News Item on Interim Report) and is closely aligned with the FCA’s position in that report.

  • The FCA believes the rights and protections currently afforded to borrowers are important and should be maintained in some form. A significant number of these rights and protections are ill suited to FCA rules and cannot be moved into the Handbook with the same level of protection. Accordingly, the FCA recommend retaining these provisions but also acknowledges that there are a number of issues with these provisions and these issues merit further consideration to ensure they continue to provide an appropriate degree of protection for borrowers without imposing an undue burden on firms;
  • The FCA believes information requirements may be better suited to FCA rules which would allow a more principles-based, outcomes focused approach and greater flexibility. However, the FCA believes that the current sanctions from the CCA should be retained for breaches of the proposed rules; this will require primary legislation to amend the existing sanctions to refer to the new rules; and
  • The FCA recognises that there are some problems with the current sanctions framework which can lead to draconian sanctions for minor infringements. The FCA suggests that this merits further consideration whether or not provisions are moved/replicated in FCA rules; one option floated in the Report is an expansion of the FCA’s rule making powers to allow for unenforceability and dis-entitlement to interest.

The FCA has now complied with its obligation to review the retained provisions of the CCA and what, if any, action is taken now falls to Government to decide.

The full Final Report can be read here: FCA Final Report on Retained CCA