In the run up to December, news on credit and lending slowed down but there were these few stories of note – including the FCA’s intro of price caps on rent-to-own firms and the Experian-Clearscore merger.
FCA proposes introduction of price cap on rent-to-own firms | FCA |22.11.18
The rent-to-own market, which includes firms such as Brighthouse and Perfect Home, will be subjected to a custom price cap which will come into force on 1 April 2019, subject to consultation. The price cap will limit the cost of the product itself, and will not allow the cost of credit to exceed the cost of the product – thereby limiting the charge for credit. Firms will have to benchmark the cost of their goods against at least three other retailers.
FCA launches further consultations ahead of the UK’s exit from the EU |FCA | 23.11.18
Brexit is on the tips of everyone’s tongue at the moment, and none more so than in the UK’s financial institutions. This press release by the FCA announces the release of a further consultation on its approach to the UK’s exit from the EU, as it had done in October. This time the consultation focuses on proposals should the UK leave the European Union on 29 March 2019 without an implementation period. The FCA is urging organisations across all sectors to engage with this consultation.
CMA: Experian-Clearscore merger “could reduce competition” | Credit Strategy | 28.11.18
According to the Competition and Markets authority, the acquisition of ClearScore by Experian, announced in March this year, is likely to decrease the amount of competition in the credit checking vertical. According to the article, the CMA state this merger would mean there would be less incentive for the merged organisation to innovate and improve its service, therefore negatively impacting on consumers. An assessment will take place before the CMA’s statutory deadline of 11 March 2019.
Annual growth of consumer credit slows | Credit Connect | 29.11.18
Bank of England figures signal that consumer credit increased by £0.9 million last month, exhibiting a similar trend to the past few months although lower than the same period in the last few years. There was a net rise of £0.9 billion in October’s bank lending and bond issuance; credit card borrowing accounted for £0.4 billion of it. In the article George Robbins, director of financial services at TransUnion is quoted predicting that consumer credit will increase over the Christmas months, stating that, “the Christmas rush is going to be a test of good lending practices”.