#LEND360 ● LEND360.org

John Gordon, FactorTrust Jeannette Burgess, Walker Morris, LLP Marcus Vernon, Realex Payments

UK Regulatory Overview Financial Conduct Authority took responsibility (from Office of Fair Trading) for Consumer Credit from 1 st April – They have stronger powers and more resources available Lenders must adhere to the FCA’s rules relating to conduct of business. Published in Feb 14, they cover general business management, systems and controls, treating customers fairly, specifically – Affordability assessments, limits on rollovers, limits on use of Continuous Payment Authority (CPA) to take payment and risk warnings displayed prominently by lenders – FCA is also looking back at previous lender activities / processes

UK Regulatory Overview Consultation Paper 14/10 – Statutory duty to impose a price cap (proposed £24 per £100 over 30 days, never pay back more than double the principal). – Data Sharing - Expect lenders to be reporting in ‘real-time’ to 2 CRAs by Nov 14, already gathered information on lender activity from CRAs. UK Competition Commission (now Competition and Markets Authority) asked to look into the market and lenders. Increased scope to include lead generators. – They state that there is an adverse effect on competition and proposed remedies including price comparison sites, increased transparency on costs & charges and the role of lead gens. Application authorization periods starts Dec. 1, 2014

Panel Questions Q: Do you expect any additional regulatory changes by the FCA from their consultation period, or is it expected to be what they initially communicated?

Panel Questions Q: What are the some of the important dates and activities that lenders need to be aware of going forward?

Panel Questions Q: What has the impact so far from the FCA guidance to the HCSTC (high cost short term credit) industry in the UK?

Panel Questions Q: Do you see new lending products being developed or will existing one month (payday) products survive?

Panel Questions Q: What’s the real-time credit reporting guidance for HCSTC lenders the FCA announced from their recent consultation communication?

Panel Questions Q: What are HCSTC lenders doing to address real- time credit reporting and when does this need to be done?

Panel Questions Q: Do you think real-time reporting will become compulsory for HCSTC and potentially other lending areas?

Panel Questions Q: Once these regulatory changes take effect on January 2, 2015, do you think regulatory noise in the HCSTC industry will quiet down a bit?

Panel Questions Q: How have all the regulatory changes impacted the profitability of existing UK lenders?

Panel Questions Q: How does the panel anticipate the investigation by the CMA will affect lead generation?

Panel Questions Q: What is the wider impact of the recent announcement that Wonga will be writing off £220m of customer’s loans as it was not considered that their affordability assessments had been sufficient?

Panel Questions Q: In your opinion, what will the future HCSTC market look like in the UK? What will be the impact on consumers?

Panel Questions Q: What are the advantages / disadvantages for new HCSTC lending entrants into the UK market?