CP15/33: Consumer credit: proposals in response to the CMA’s recommendations on high-cost short-term credit

Published: 28/10/2015     Last Modified: 28/10/2015

This Consultation Paper is issued in response to the Competition and Markets Authority (CMA) final report into payday lending, published in February 2015. It contains proposals for additional standards for price comparison websites (PCWs) which compare high-cost short-term credit (HCSTC) products and invites views on them. The Consultation Paper also addresses a number of other areas: the use of real-time data sharing to enable informed credit assessments, measures to improve shopping around without affecting consumers’ credit ratings, improved disclosure on the costs of borrowing, and credit broking/lead generation.

Why are we issuing this Consultation Paper?

The CMA completed its market investigation into payday lending in February 2015. Based on the findings, the CMA concluded that there are features of the UK payday lending market that prevent, restrict or distort competition, leading to an adverse effect on competition.

To address the adverse effect on competition the CMA published a package of remedies, some of which were to be implemented by the CMA and others which were recommendations to us.

We have worked closely with the CMA in the course of its market investigation and we have considered the recommendations. This paper sets out our response.

CP15/33: Consumer credit: proposals in response to the CMA's recommendations on high-cost short-term credit (PDF)

We carried out consumer testing to help us develop our proposals, details of which can be found in the following document:

High-cost short-term credit price comparison websites: A behavioural study for the Financial Conduct Authority

Who is this consultation aimed at?

This consultation paper should be of interest to:

  • authorised firms with permissions relating to high-cost short-term credit and credit broking, including firms with interim permission
  • firms that are applying for, or considering applying for, authorisation to carry out these activities
  • trade bodies representing consumer credit firms
  • consumer organisations.

What are the next steps?

We want to know what you think of these proposals. Please respond to the questions in Annex 1 of the Consultation Paper by 28 January 2016 using our online form.

You can also email your answers to us at:

cp15-33@fca.org.uk

Or send them in writing to:

Anna Solar-Bassett
Consumer Credit Policy Team
Strategy & Competition Division
Financial Conduct Authority
25 The North Colonnade
Canary Wharf
London E14 5HS

We will consider your feedback and publish a Policy Statement with final rules and guidance.

Further information

CMA payday lending market investigation: final report

CP13/10: Detailed proposals for the FCA regime for consumer credit

PS14/3: Final rules for consumer credit firms

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