Compliance Roundup - 7 September 2022

CSA invites member feedback on Breathing Space in advance of October stakeholder meeting
Latest Gough Square Chambers article looks at who can commence court proceedings in relation to assigned debts
MaPS issues call for evidence on debt advice clients with deficit budgets
FCA publishes latest quarterly consultation
MMHPI applies for ‘super-complainant’ status
HCEOA seeks views in survey on expanding access to high court enforcement officers
House of Commons Library shares research briefing on Data Protection and Digital Information Bill
FMLC issues letter to EBA on uncertainties around NPL Directive
FCA shares report on robo-advice and repayment decisions
FCA establishing advisory committee on ESG
FCA issues August regulation roundup
FCA launches Diversity, Equity and Inclusion Innovation Spotlight
CMA shares ICO papers on data protection harms
Consultations

CSA invites member feedback on Breathing Space in advance of October stakeholder meeting

The CSA is due to attend a creditor stakeholder meeting in relation to the Debt Respite / Breathing Space Scheme on 11 October 2022.

In advance of that meeting, we would encourage members with any relevant feedback or concerns to get in touch so that we can ensure any key issues can be addressed. Comments can be shared with CSA head of compliance and membership, Claire Aynsley ( claire.aynsley@csa-uk.com). 

Latest Gough Square Chambers article looks at who can commence court proceedings in relation to assigned debts

In the latest Gough Square Chambers consumer credit column, George Spence-Jones considers the issue of who can commence court proceedings to recover assigned debts - the assignee and / or the servicer of the assignee? 

The article was drafted in the light of the County Court appeal decision of HHJ Robinson in Intrum UK Finance Ltd v Baldwin (unreported), 8 June 2022, which looked at how paragraph 55 of Part IV of the Schedule to the Financial Services and Markets Act 2000 (Exemption) Order 2001 (SI 2001/1201) affects the issuing of court proceedings. This decision will be of particular interest to debt purchaser members.

In particular, the decision that if a debt-purchaser / assignee is exempt under paragraph 55 the servicer acting through the debt purchaser / assignee can bring proceedings to recover a debt, is helpful for debt purchasers. Likewise, it is useful that the judgment states that the previous County Court appeal decision of Idem v Webster was wrongly decided in relation to distinguishing between being paragraph 55 exempt and then needing some other exemption or authorisation to bring a claim to recover a debt.

It is also interesting that in the view of the writer of the column, arguably the debt purchaser/assignee can also issue proceedings in its own name, but this case was not particularly helpful in this respect. 

From a practical perspective, members’ attention is particularly drawn to the conclusion to the column that where debt purchasers that rely on the paragraph 55 exemption wish to issue proceedings to recover a debt, “relying on this decision, including wording in the letter before action and claim form to the effect that the servicer is bringing the claim through the debt purchaser/assignee will assist in validating proceedings”.

The full article, along with past consumer credit articles, is available here.

MaPS issues call for evidence on debt advice clients with deficit budgets

The Money and Pensions Service (MaPS) has issued a call for evidence seeking views and input on debt advice clients that have deficit budgets. MaPS is aiming to understand what help can, or could, be offered to such clients, as well as what steps MaPS can take to enable that help to be given. 

The call for evidence can be found here and responses are due by 1 December 2022.

FCA publishes latest quarterly consultation

The FCA has published its latest quarterly consultation, where it consults on various minor or consequential changes to the FCA Handbook. 

Quarterly Consultation No. 37 includes proposals in chapter 4 to amend PERG, CONG and MCOB to reflect changes brought in by the Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) (No.2) Order 2022 in relation to the ‘high net worth’ exemption from the consumer credit regulatory perimeter. The consultation paper notes that the changes enable certain credit agreements that were previously outside the scope of the exemption to fall within it, provided the borrower can meet certain additional residency requirements. The FCA is proposing to change relevant provisions in the Handbook to reflect the legislative change.

The FCA also proposes in chapter 5 to clarify the definition of a ‘significant SYSC firm’ as the term had been interpreted as extending the scope of the enhanced part of the Senior Managers & Certification Regime (SM&CR), which had not been the FCA’s intent. The FCA intends to clarify that a ‘significant SYSC firm’ would only be one that would have been significant IFPRU firms and IFPRU investment firms.

The FCA’s quarterly consultation is available here. Responses to chapters 4 and 5 are due by 26 September 2022; response to chapter 3 are due by 3 October; responses to chapter 2 are due by 10 October 2022.

MMHPI applies for ‘super-complainant’ status

The Money and Mental Health Policy Institute (MMHPI) has made an application to HM Treasury to be designated as a ‘super-complainant’ to the FCA and the Payment Systems Regulator (PSR).

A ‘super-complainant’ is a designated consumer body with the right to make a ‘super complaint’ to the FCA or PSR where they consider that there are features of a market that are or which may be significantly damaging the interests of consumers. 

Any party with views on the application should submit their comments to HMT by 23 November 2022.

The MMHPI application can be viewed here.

HCEOA seeks views in survey on expanding access to high court enforcement officers

Earlier this year, the High Court Enforcement Officers Association (HCEOA) released a report, Supporting Court Users – A Right to Freedom of Choice, which called for court reform to enable high court enforcement officers to act in the enforcement of County Court Judgments for debts under £600. 

The HCEOA has now issued a survey seeking views on the issue, in the interest of gathering further feedback on the proposals.

The original report can be found here. The survey is available here and is open until 24 October 2022.

House of Commons Library shares research briefing on Data Protection and Digital Information Bill

The House of Commons Library has shared a research briefing on the Data Protection and Digital Information Bill.

The paper provides an overview of the Bill, including the background to it and the proposed changes to data protection law. The Bill is due to have its second hearing on 5 September 2022.

The research briefing is available here. 

The CSA also recently prepared an overview of the Bill, which is available to CSA members here. 

FMLC issues letter to EBA on uncertainties around NPL Directive

The Financial Markets Law Committee (FMLC) has published a letter sent to the European Banking Authority (EBA) concerning its draft implementing technical standards (ITS) in relation to the Directive on credit servicers and credit purchasers. The draft ITS specify disclosure templates to be used for the provision of information in connection with the sale of non-performing loans (NPLs).

The FMLC letter identifies a range of uncertainties arising from the Directive and ITS. In particular it notes uncertainties around the scope of the Directive and the types of organisation that fall within it, as well as the Directive seemingly overlooking the secondary market in performing loans. The FMLC also encourages the EBA to provide interpretive guidance on the Directive.

The FMLC letter is available here.

FCA shares report on robo-advice and repayment decisions

The FCA has shared an occasional paper and a webpage on the subject of robo-advice and whether it can improve borrowers’ repayment decisions.

The occasional paper details the results of a robo-advice experiment that asked consumers to make hypothetical borrower repayment decisions. The findings indicate that access to free robo-advice improves repayment decisions. On the other hand, the findings note that consumers learn little from using robo-advice.

The FCA webpage can be found here and the occasional paper is available here.

FCA establishing advisory committee on ESG

The FCA has confirmed that it is seeking external experts to form a new advisory committee to the FCA Board to work on Environmental, Social and Governance (ESG) issues. 

The Committee will provide advice to the FCA Board on relevant emerging ESG topics or issues, how the FCA executes oversight of ESG issues (as a regulator and its own operations) and how the FCA should develop its ESG strategy.

Further details can be found in the FCA announcement here.

FCA issues August regulation roundup

The FCA has issued its regulation roundup email for August 2022, providing updates on recent regulatory news and developments.

The August email includes the recent changes to the appointed representatives regime, details of the FCA’s annual public meeting and the recent Dear CEO letter to BNPL firms.

The roundup can be viewed here.

FCA launches Diversity, Equity and Inclusion Innovation Spotlight

The FCA has published a webpage with details of its new Diversity, Equity and Inclusion (DEI) Innovation Spotlight. The initiative aims to encourage and support firms developing innovative products in the DEI space.

The FCA is inviting any firms that are wanting to launch an innovative product or service that focuses on the fair treatment of consumers, vulnerability and the Consumer Duty to work with the FCA’s innovation services, such as the Regulatory Sandbox.

Further details are available here.

CMA shares ICO papers on data protection harms

The Competition and Markets Authority (CMA) has shared papers on data protection harm published / prepared by the Information Commissioner’s Office (ICO) earlier this year.

The papers form part of the ICO’s Harm Project, which aims to improve understanding of ‘harm’ in a data protection context. One of the papers sets out the ICO’s views on data protection harm. The other is a literature review commissioned by the ICO looking at literature relevant to data protection harms.

The ICO paper on its views on data protection harm is available here; the literature review can be viewed here.

Consultations

The following are consultation papers that are currently open for responses and may be of relevance to some or all CSA members.

If an industry response is warranted and you want to contribute, please contact CSA head of policy, Henry Aitchison (henry.aitchison@csa-uk.com). 

Scottish Government: Moveable Transactions Bill
Closing date: 6 September 2022

ABI: GDPR Code of Conduct
Closing date: 16 September 2022

Civil Justice Council: Costs Working Group: consultation
Closing date: 30 September 2022

Insolvency Service: Review of personal insolvency: call for views
Closing date: 24 October 2022