Credit reporting: Interim Working Group (IWG)

IWG Report One

You can find the IWG’s first report (PDF) here.

Report One – the FCA’s interim response  

The FCA welcomes the IWG’s first report (PDF), which sets out its recommendations on what the CRGB should do. We thank the Chair and secretariat and IWG members for the report and for engaging with us collaboratively. 

We will provide detailed feedback to the IWG upon publication of their final report later this year. In the interim, we will provide feedback on key issues or concerns, so that they can be considered by the IWG.  

We particularly welcome the proposed purpose and scope of the three proposed objectives and the focus on outcomes. We look forward to the IWG’s subsequent reports expanding on these areas and others still subject to discussion and consultation, in particular the legal framework in which CRGB should operate.

We would like the IWG to note the following considerations as they continue their work: 

• We expect that the Consumer and Future-Looking Objectives are given equal priority and weight as the Operational Objective. This will enable the CRGB to achieve the outcomes proposed in the CIMS reports. 
• We expect that a later IWG report will cover CRGB’s relationships with other relevant regulators in addition to the FCA.

IWG Report Two 

You can find the IWG’s second report here (PDF).

Report Two – the FCA’s response

The FCA welcomes the IWG’s second report (PDF), which sets out its recommendations on how the CRGB should be constituted. We thank the Chair, secretariat and IWG members for collaborating and compromising to produce recommendations, particularly given the complex issues involved.

Our feedback on key issues in the IWG’s second report

We would like the IWG to note the following considerations as they continue their work.

Fair representation

We welcome the safeguards proposed in this report to ensure that all stakeholders are represented equitably in CRGB’s decision-making. In future reports, we expect that the IWG will carefully consider the need for strong representation from consumers and challenger market participants on an ongoing basis. This will include considering how safeguards apply to the Board’s decision-making. We expect safeguards to ensure Board members are not unfairly sidelined. We would also strongly suggest a permanent consumer council, given the importance of ensuring ongoing consumer representation in the CRGB. It is also important that the CRGB can make decisions in an agile manner. As stated in our final market study report, we believe that this could be achieved through a decision-making process that doesn’t require all members to agree and is more transparent, fair and representative. 

Accountability

We expect that a later IWG report will further explain how CRGB will be held accountable and how it will engage with regulators. We expect this to include a mechanism for consultation with the FCA on very significant constitutional or policy decisions. It is important that industry participants, consumers, and regulators can hold the CRGB to account for its actions. This will be particularly important given the proposal that the directors will also be the CRGB’s only members, risking a lack of accountability. IWG should look at the adequacy of the proposed process for appealing Board decisions and the appropriateness of the Board reviewing its own decisions.   

Funding

We welcome the significant progress on the CRGB funding model and look forward to seeing the approach to annual subscription fees. We welcome that the IWG is considering competition issues in relation to the CRGB funding model, and encourage it to continue to do so in future reports. 

Regulatory ‘endorsement’

We understand the need for CRGB to have powers to enforce industry rules. We note the report comments about strengthening credibility of the rules through some form of regulatory endorsement. While we recognise certain industry codes (which cover unregulated activities) and industry guidance on FCA requirements, it is not immediately clear that CRGB’s data sharing rules would fall into either of these categories. We are open to further discussion on this point. We would not consider an MoU with the CRGB (a document setting out mutually agreed arrangements for cooperation and coordination) to be an ‘endorsement’ as is proposed.  

Responses to specific questions the IWG has asked us  

Nominations to the CRGB Board

The IWG proposes that an FCA representative sits on an initial nominations committee for the CRGB’s independent chairs and directors. We would be content to be involved in this process to help establish the CRGB Board, should the IWG maintain this proposal in their final report. 

Proposed FCA levy

The IWG also requests that we consider supporting an FCA levy fees model, alongside its primary funding proposal, aiming to minimise the complexity of collecting funding. Given the CRGB will be an independent industry body, we do not think it would be appropriate for the FCA to be responsible for collecting the CRGB’s fees. We currently only do this for other regulatory bodies (eg the Financial Ombudsman Service and the Financial Services Compensation Scheme). As such, we would strongly encourage the IWG to look at other collection models.

The IWG held an event on 23 September 2024 at the FCA’s London office to update data contributors and users on progress on its work. The event was attended by over 70 parties representing lenders, CISPs, fintechs and regulators.

Jackie Keogh, IWG independent chair, opened the event by providing an overview of the recommendations made by the IWG in report two. She explained that the future credit reporting governance body (CRGB) will be a company limited by guarantee, with a single tier structure, managed by a Board of independent and industry nominated directors. The IWG outlined decision-making processes along with the funding model and the fact that CRGB will gain its powers from contract law. 

The audience asked questions of both the FCA and the IWG chair, predominately on the governance model, which understandably extended into other FCA and industry-led remedies. The debate was open and far-reaching with questions on timelines, remedy prioritisation and the FCA’s future engagement in CRGB.

Breakout sessions followed, focusing on how attendees wish to participate in and be informed of CRGB’s activities. They also provided valuable insight on expectations in terms of accountability and transparency for the new entity. The input from these sessions will contribute to the recommendations to be published in report three.

Thank you to the FCA for use of their facilities, the IWG members for their support in running the event and, most importantly, the participants for their openness and contributions.

The IWG hosted its first large event to engage with data users and contributors at the FCA’s London office on 26 March 2024.

The focus of the event was to share progress to date on the work of the IWG, validate key content in the first report and seek input on central subjects in the second report.

The event was attended by 50 participants representing mainstream and alternative lenders, trade associations, partner regulators, the Treasury and some of the IWG members.

The FCA opened the event by outlining the state of the credit information industry and its expectations as outlined in the Credit Information Market Study (CIMS) final report. The participants provided feedback on the proposed Credit Reporting Governance Body (CRGB) purpose, which showed 89% of the attendees either agreed or strongly agreed with the core purpose. Feedback highlighted the need to clarify the term 'all stakeholders' and make sure consumers were specifically mentioned.

The attendees also considered the 3 proposed CRGB objectives which received strong support. In all, 98% of the voting participants agreed there should be an operational objective, 86% agreed a consumer objective is needed and 81% supported a future-looking objective.

Finally, break-out sessions delivered significant constructive input for the IWG to consider about the principles to be applied to the governance of the CRGB.

Feedback after the event from attendees showed that they valued the opportunity to influence the design of the CRGB.

A further data user and contributor event will be held later in the year. The next major event will be for consumers on 25 June 2024. Further details will be provided in the coming weeks.

Thank you to the FCA for use of their facilities, the IWG members for their support in running the event and, most importantly, the participants for their openness and contributions.

It is with great pleasure that I am writing this first communication to the Credit Information Market participants. I took up my role as Independent Chair of the Interim Working Group (IWG) on 2nd January 2024. The IWG was created to make recommendations to the FCA on the reform of industry governance arrangements. The reform to the governance is seen as a key precursor to many of the other potential remedies that are proposed in the FCA final report.

The IWG kick started their year with a meeting on 18th January. The minutes of the meeting can be found at the bottom of this page under ‘Group meetings’, minutes will be published for all future meetings. Being the first meeting, much of the agenda focused on what we need to do and how we plan to do it. The proposed approach has been submitted to the FCA for consideration as part of the sign off of the Terms of Reference. Additional detail on the workplan will be included with the publication of the Terms of Reference in the coming weeks.

The IWG members are keen to ensure the thoughts of as may parties can be captured as part of the governance effort. Feedback can be provided directly to IWG members, via [email protected] or during the industry events that will be held and published here in the coming months.

12 September 2024

This meeting continued the Interim Working Group’s (IWG’s) progression of the third stage report topics, set out in the revised Terms of Reference (PDF) on page 12.

The IWG reflected on stakeholder feedback received in response to its second report and members agreed a way forward in terms of progressing the topics raised in this feedback over the coming weeks.

A detailed discussion was had on the Credit Reporting Governance Body's (CRGB'S) role in terms of policing of its scheme rules and the process that will be followed in the event of non-compliance by CRGB subscribers. The IWG considered different assessment stages which conclude in an independent review. Further evaluation will be needed before the IWG can make a definitive recommendation on this within its third report. However, a standard complaints process was discussed and agreed to by members.

The IWG discussed the CRGB’s approach to its relationship with regulators and Government. A clear framework in terms of proactivity of engagement was agreed to and will form part of the recommendations in the IWG’s third report.

The IWG continued the debate on the role of the CRGB within the design and implementation of the CIMS industry-led remedies and implications for the CRGB’s staffing requirements. IWG members agreed to a split of responsibilities between CRGB staff and industry stakeholders and to input this into the CRGB cost model being built by the IWG secretariat team.

The IWG also discussed the CRGB’s conflict of interest policy and Board protocol. IWG members were comfortable with the processes and safeguards presented and it was agreed to include these as recommendations within the IWG’s third report once the CRGB’s wider Board composition has been given further consideration.

The next IWG monthly meeting will be held on 10 October via Microsoft Teams.

8 August 2024

This meeting of the Interim Working Group (IWG) was the first of several discussions about the third stage report topics, set out in the revised Terms of Reference (PDF) on page 12.

The meeting began with a discussion about  the importance of the Credit Reporting Governance Body (CRGB) being held accountable by its key stakeholders (identified in report one PDF) and acting with transparency. A set of accountability and transparency principles were debated and provisionally agreed by the members covering areas such as CRGB’s publications, engagement with its subscribers and participants, and monitoring compliance and effectiveness both internally and externally.

There were then discussions about the CRGB’s cost model being built by the IWG Secretariat team, the role of the CRGB within the design and implementation of the CIMS industry-led remedies and implications for the CRGB’s staffing requirements. It was agreed that further work will need to be done to better estimate the costs for CRGB of its remedies work as well as its BAU governance activities.

The IWG also discussed the CRGB’s decision-making including its requirements for a quorum, conflicts of interest policy and Board decisions requiring special procedure. Initial discussions were held about the constitution of the CRGB’s Advisory Councils. These topics will be discussed again with the aim of reaching an agreement on the right approaches.

The next IWG monthly meeting will be held on 12 September at TransUnion’s offices in London.

13 June 2024

This meeting first focussed on the proposed board governance model of the Credit Reporting Governance Body (CRGB). 

The Interim Working Group (IWG) members provisionally agreed to a single tier legal membership model for CRGB, where the Directors on CRGB’s Board will also be the legal members of CRGB. The IWG continue to debate the membership of the board and advisory councils as this underpins many other elements so deserves due consideration. Whilst a mixed board, with an independent chair and an equal split between nominated and independent board members has been agreed in principle, further discussion is still required on the selection process.

Safeguards to make sure consumer groups and smaller businesses operating in the credit information market are sufficiently represented within the CRGB’s governance structure were also debated and provisionally agreed with the IWG members.  But further industry consultation will be needed on this topic.

The IWG also discussed the proposed funding model for the CRGB. The source of CRGB’s funding for its set-up was debated and it was provisionally agreed, subject to internal firm discussions, that a limited number of large firms would pre-pay their annual CRGB subscription fees to cover these costs.

It was also agreed that the IWG secretariat would do further analysis to determine whether a minimum threshold for the annual subscription fee is feasible, whereby firms with turnover below a certain level would not be required to contribute to CRGB’s funding. This will be in addition to further exemptions to payments relating to social good issues.

The next IWG meeting will be on 27 June and will be held online via MS Teams. 

27 June 2024

For the Credit Reporting Governance Body (CRGB) to operate effectively as a governance body, it needs to have the appropriate powers to compel industry to behave according to its pre-agreed rules. In this meeting, the Interim Working Group (IWG) discussed and agreed that contract law was the only viable option for the CRGB, given the current phase of the political cycle. 

The IWG also discussed the liabilities relating to the CRGB as an incorporated entity, namely for its guarantors, directors and senior management. Initial conversations were had around the liabilities for the CRGB in relation to data sharing and contracting, but the IWG will need to continue its work on how the CRGB will operate before any liability implications can be established.

The IWG returned to the issue of the proposed funding model for the CRGB and debated the details of CRGB’s funding exemptions. A social good definition was agreed upon as well as an in-principle turnover exemption, subject to more analysis by the IWG secretariat to establish:

• the exact turnover threshold 
• its implications for the entities funding the CRGB

Lastly, the IWG discussed the proposed Board governance model and agreed to recommend a highly debated model within its second report to the FCA. The report will be issued to the FCA on 12 July and published on the IWG landing page on 16 July.

The next IWG meeting will be held on 8 August.

9 May 2024

This meeting continued to work on the second stage report topics, set out in the revised Terms of Reference (PDF) on page 12.
The meeting began with the FCA’s Credit Information Market Study (CIMS) team outlining the FCA’s high-level feedback on report one. The FCA’s feedback was published on the Interim Working Group’s (IWG) landing page on the 15 May. The initial feedback only addresses issues and concerns to allow for consideration by the IWG in later reports.

The IWG’s external legal advisors, Mills and Reeve, outlined the work they had done on assessing the preferred method of incorporating the Credit Reporting Governance Body (CRGB) as a legal entity. They provided further evaluation on the shortlisted models proposed by the IWG. It was concluded that a company limited by guarantee was the most appropriate incorporation vehicle for the CRGB. The IWG members endorsed the conclusion and the IWG will recommend this method of incorporation to the FCA in its second report. 

Discussions moved onto a more detailed debate on the potential board structure of the CRGB. The main topic of debate focussed on whether an independent or mixed board was most appropriate for the CRGB.

Important points were raised by members about the need to balance the level of subject matter expertise whilst maintaining appropriate independence and keeping costs at a manageable level. It was unanimously agreed that the board should have an independent chair with most, but not all, of the IWG members also deciding that a mixed board would be preferable. There were inconclusive discussions on the split of nominated and independent directors on a mixed board and how this would operate with board committees and/or advisory groups. Further deliberation is needed on governance. 

Funding of the CRGB was briefly discussed, with a focus on the value proposition of the CRGB which will incentivise industry to want to contribute to the CRGB’s funding. An interim IWG meeting has been scheduled on the 30 May to discuss funding in further detail.
The next IWG monthly meeting will be held on the 13 June. 

30 May 2024

This extra meeting was scheduled to supplement the Interim Working Group’s (IWG) initial discussions about funding for the Credit Reporting Governance Body (CRGB).

The IWG considered a set of funding principles and evaluated the alternative funding models used in the industry.

The secretariat team also presented a potential funding model for CRGB to the members of the IWG. The model proposed:

• an annual subscription fee for ongoing cost coverage
• a specific charge relating to CRGB’s set-up costs

The subscription fee is subject to a tiered system, split by industry stakeholder cohorts and tiers based on firm size.

The model was well received by a majority of the members. The secretariat team will now carry out more work to:

• validate the funding cohorts
• decide how much each cohort would be expected to contribute

The next IWG monthly meeting will be on 13 June at the Finance and Leasing Association offices in London.  

11 April 2024

This meeting was the first of several discussions about the second stage report topics, set out in the revised Terms of Reference (PDF) on page 12.

The meeting began with the Interim Working Group’s IWG’s Legal Sub-group sharing their thoughts about the preferred method of incorporating the Credit Reporting Governance Body (CRGB) as a legal entity. The current view is that the CRGB would likely either be a company limited by guarantee or shares. The members agreed to seek input from the external legal advisors hired by the IWG to confirm the position and validate discounted options, about which incorporation vehicle the IWG should recommend to the FCA in its second stage report.

There were also discussions around governance principles, with a particular focus on the CRGB’s board structure. Further debate is needed on this topic, so the IWG Secretariat will be seeking individual written submissions from all IWG members about their views in the next few weeks.

Funding of the CRGB was also discussed. Initial views were shared, particularly around funding principles and what types of organisations would be expected to contribute to the funding of the CRGB. Potential funding models were also debated, with some members expressing an initial preference for a tiered membership model.

However, it was agreed that both the funding and governance models need to be explored in more detail before any substantive decisions can be made by the members. Therefore, the IWG Secretariat will work closely with the IWG’s Financial and Legal Sub-groups in advance of the next IWG monthly meeting to prepare in-depth proposals for further debate.

The members agreed and signed-off the first stage report sent to the FCA on 12 April and published on the IWG landing page on 16 April. The members will seek feedback on the first stage report with their cohorts and share this with the IWG’s Independent Chair and Secretariat team within the next month.

The next IWG monthly meeting will be held on 9 May at UK Finance’s offices in London. 
 

14 March 2024

The meeting continued work on the First stage report topics, set out in the revised Terms of Reference (PDF) on page 10.

Significant progress was made and there was agreement about the Credit Reporting Governance Body’s (CRGB’s) purpose and objectives. The single sentence purpose will be complemented by three objectives:

• operational
• consumer
• future looking

The members expressed strong views about focussing the CRGB’s consumer objective on enhancing financial inclusion alongside wider consumer outcomes.

They also discussed and finalised the principles that would define the role of the CRGB. The scope of the roles was debated in more detail, with a particular focus on the scheme and any educational and/or policing role that the CRGB may be expected to play. IWG members were keen not to completely rule out roles that may be needed in the future.

There was debate about the types of datasets that will be relevant to the CRGB. An important distinction was drawn in terms of what data the CRGB may:

• govern directly
• have an interest in, as part of its wider role and remit

Before this meeting, 4 IWG sub-groups were set up with members focussing on the legal, financial, operational and engagement topics that the IWG needs to cover as part of its 9-month workplan as set out in the revised Terms of Reference.

The IWG’s engagement plan has been finalised and the secretariat team has already begun connecting with government and relevant regulators about its work. The IWG will soon host its first large event to engage with data users and contributors at the FCA’s London office on 26 March.

The next IWG meeting will be held on 11 April at the Finance and Leasing Association offices in London.

8 February 2024

This meeting was the first of several discussions about the proposed content of the IWG’s reports to be published and submitted to the FCA.  

This meeting focused on the first stage report (as set out in the revised Terms of Reference PDF). Discussions were held about the potential purpose of the Credit Reporting Governance Body (CRGB), the stakeholders likely to be involved or impacted by the CRGB’s future work and the remit of the CRGB.  

The members agreed that CRGB should have a social purpose. It became clear that all were keen to place consumer outcomes at the forefront of the CRGB’s focus, alongside its role in supporting the effective sharing and use of credit information and related data.  

Before this meeting, members and secretariat developed detailed workplans for the first two reports and members took responsibility for delivering specified aspects. 

A communications plan has been developed, and will soon be finalised, to make sure the IWG engages effectively with industry including those cohorts not represented directly by the group. 

The next IWG meeting will be held on 14 March at the TransUnion offices in London. 

18 January 2024

The IWG formally convened on 18 January under the auspices of the Independent Chair. The IWG discussed proposed updates to the Terms of Reference published on the 5 December 2023 alongside the CIMS final report. In addition to reordering of outputs, the main change was the addition of a transition plan, from SCOR to CRGB, which will be subject to agreement with the SCOR membership. The group also discussed the inclusion of 2 addendums.

The first addendum covers the roles and responsibilities of the independent chair, secretariat team and members.

The second addendum covers the workplan and proposed timings for the publication of the IWG’s recommendation reports to the FCA as well as provisional dates for events to engage with wider industry.

The members agreed on the content of the addendums with suggested changes which provide greater clarity on responsibilities and sequencing of activities. Agreement was also reached on the updating and publication of the revised Terms of Reference. The FCA subsequently approved and signed-off on the revised Terms of Reference.

The IWG also discussed ways of working, including determining the locations for future meetings and industry events. The members agreed to prioritise, ahead of the next meeting, developing detailed workplans for the first two reports and assigning members responsibility for delivering on specified aspects of these workplans. The members also agreed to begin to develop a communications plan to ensure the IWG engages effectively with industry, particularly those cohorts not represented directly by the group.

The next IWG meeting will be held on the 8 February at the FCA offices in Stratford, London.

The IWG seeks to ensure transparency of its efforts. You can see updates of the IWG’s work, including events being held, on this webpage.

The Credit Reporting Governance Body, (CRGB) is the provisional name for the future governance body for the Credit Information Market. It will represent the interests of lender organisations, trade bodies, consumers and regulators.

The FCA Credit Information Market Study final report (PDF), published in December 2023, said that the industry governance arrangements need to be more agile.

The report also said that the proposed change will allow the organisation to more effectively respond to the evolution of the market and technology.

The IWG will only work on the governance remedy. The reform to the governance is seen as a key precursor to many of the other potential remedies that are proposed in the FCA final report. The IWG does not have a mandate to advance other remedies.

SCOR is the current governance entity and will continue to operate until a transition to the CRGB has been completed. IWG does not replace SCOR. IWG operates in parallel to SCOR with a different mandate.

CRGB will form the future governance for the Credit Information Market and a transition plan from SCOR will be delivered as part of the recommendations to the FCA.

The FCA and IWG outlined the scope and operational expectations of the IWG in their Terms of Reference (PDF). 

The FCA confirmed IWG membership to ensure a wide representation, appointed the independent chair to the IWG and provides secretariat support.

Feedback can be provided directly to IWG members, via [email protected] or during the industry events that will be held and published on this webpage in the coming months.

The IWG members are keen to make sure the thoughts of as may parties can be captured as part of the governance effort as possible.

IWG is an advisory body with no decision-making powers. It will make recommendations to the FCA on the design, implementation and operations of the new CRGB.

Any extension beyond the IWG’s 9 month programme, which started in January 2024, would need the approval of the FCA.

The IWG will work in a phased approach and has specific milestones to reach when reporting to the FCA.
 

Any recommendations to the FCA should have unanimous support among the IWG members.

Where this is not possible, the Chair should provide recommendations on a way forward and a ranking of options informed by the IWG’s discussions and based on the Chair’s own analysis.

Remedies taken forward through FCA rules will be subject to normal FCA consultation processes. Find out more about updates on CIMS.

The CIMS outlined a package of remedies categorised into 3 distinct types:

• FCA-led
• Industry-led
• Joint FCA and industry remedies (ie the CRGB)

The joint governance remedy is the first to be advanced. The reformed industry governance arrangements will be responsible for facilitating the thinking, development and implementation of the industry-led remedies. 

The FCA-led remedies will be advanced in parallel, with the remedies to improve data quality prioritised. The first steps will be to progress towards a consultation paper on rules for mandatory data sharing by the end of 2024.

The IWG recommendations to the FCA on the future governance arrangement will include a transition plan from SCOR to CRGB. This plan will include responsibilities and timing which will be agreed with the members of SCOR.