CP17/27: Assessing creditworthiness in consumer credit

Open consultation: CP17/27
Consultation closes
Policy Statement
Q2 2018
Q2 2018

We are consulting on proposed changes to our rules and guidance on assessing creditworthiness in consumer credit.

Show CP17/27 (PDF)

This is in light of concerns about the risk of potential harm to consumers from poor culture and practice by firms. This could lead to consumers being granted credit which they cannot afford to repay, causing financial distress. It could also lead firms to develop processes which are unduly costly or restrictive.

In particular, we want to clarify:

  • the distinction between affordability and credit risk
  • the factors that should be used when deciding the proportionality of assessments
  • the role of income and expenditure information
  • our expectations around firms’ policies and procedures

We have undertaken research to inform our judgment.

Read the research findings (PDF) 

We have also published an Occasional Paper:

Occasional Paper No 28: Preventing financial distress by predicting unaffordable consumer credit agreements: An applied framework

Who this applies to

This consultation principally affects:

  • consumer credit lenders
  • peer-to-peer platforms

It will also be of interest to trade bodies and consumer organisations.

What you need to do

Please send us your comments by 31 October 2017: 

Online response form

You can also:

  • email [email protected] or
  • write to: Consumer Credit Policy, Financial Conduct Authority, 25 The North Colonnade, London E14 5HS

Next steps

After considering all feedback, we expect to publish a Policy Statement with final rules and guidance in the first half of 2018.

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