We continue to actively supervise this sector, to monitor compliance with our rules but also to better understand business models. We review the impact of our interventions and we will take further action if we see evidence of harm.
For most borrowers, credit performs an important function, smoothing income and expenditure, which, if affordable, can be beneficial. However, unaffordable lending and borrowing can cause real harm to individuals and society. Vulnerable consumers are disproportionately affected, with some business models benefitting from consumers struggling to repay in full and on time.
We will continue to look at those areas where we believe there may be continuing harm such as in the volume of relending and firms’ affordability checks. Examples include our work on motor finance, guarantor loans and the Credit Information Market Study.
We are concerned that the business models of some retail lending products, including some subprime credit, are designed to benefit from consumers not repaying their debts in full and on time. We will carry out diagnostic work, including consumer research, to identify these business models and consider what action we may need to take.