Financial Conduct Authority (FCA) publishes its review of High Cost Credit

Monday, July 31, 2017

Today the Financial Conduct Authority (FCA) has published its review of High Cost Credit. Chris Smyth, Chief Executive of Leeds Credit Union said:   “The fact that the FCA has announced today that they are going to carry out further work on various forms of consumer credit clearly shows there is still a problem with high cost lending.”

“As a credit union we are very concerned about the rising levels of personal debt fuelled by high cost credit and how this debt burden can lead to default and damage to a consumer’s credit worthiness”.

“We have noted that the FCA is going to take further action on unauthorised overdrafts (the FCA themselves saying:  “….we believe there is a case to consider the fundamental reform of unarranged overdrafts….”). The FCA is also to take further action on Rent to Own Loans, Home-collected Credit (also known as ‘door step loans’) and Catalogue Credit. The FCA is conducting a further review on car loans.

The FCA’s confirmation today that there are continuing problems with high cost credit also highlights once again the role of Leeds Credit Union in being able to provide affordable credit at interest rates considerably less than many other types of lender.

 

Notes

Rent to Own Loans mean loans that are used to buy furniture and other goods usually on a hire purchase basis. The main proponents of this type of high cost loans being Brighthouse and  Perfect Home

The FCA’s report can be found at: https://www.fca.org.uk/publication/feedback/fs17-02.pdf

Additional information

Leeds Credit Union is a financial cooperative set up to give member’s access to affordable loans at a fair rate of interest and competitive savings plans. Credit Union members enjoy our straightforward, honest approach to their money.

Leeds Credit Union is a community focused organisation with 36,000 members and is one of the largest in the UK

Leeds Credit Union is a ‘Mutual’, meaning that it is owned members for member benefit alone.

Leeds Credit Union is authorised and regulated by the Financial Services Authority and is covered by the Financial Services Compensation Scheme, so the first £85,000 of a member’s savings are completely safe.