ABOUT: New Regulatory Reporting Requirements for Consumer Credit Introduced in 2023
LINK: https://www.fca.org.uk/publication/consultation/cp23-21.pdf
Summary
The Consumer Credit (Regulatory Reporting) Instrument 2023 introduces comprehensive amendments to the Financial Conduct Authority’s (FCA) Supervision manual. It mandates firms engaged in consumer credit lending to report detailed product sales, performance, and backbook data. These changes, effective from January 1, 2025, aim to enhance transparency and regulatory oversight in the consumer credit sector.
Key Points and Ideas
- The instrument is enacted under the Financial Services and Markets Act 2000, leveraging sections 137A, 137T, and 139A.
- The amendments impact various sections of the FCA’s Supervision manual (SUP), excluding sections 16.13, 16.15, 16.22, and 16.26.
- Firms must adhere to specific reporting requirements for product sales, performance, and backbook data.
- The reporting obligations apply to firms with permission for consumer credit lending.
- Reporting requirements include individual product sales data and performance data on regulated mortgage contracts and relevant regulated credit agreements.
- Firms must submit a sales data report within 20 business days and a performance data report within 30 business days of the reporting period’s end.
- Sales data reports must include details on regulated sale and rent back agreements, high-cost short-term credit, and home credit loan agreements.
- A single backbook data report is required per firm.
- The annex of the instrument contains forms and mandatory data reporting fields.
Key Statistics
- Reporting start date: January 1, 2025.
- Reporting frequency for sales data: Quarterly.
- Reporting frequency for performance data: Semi-annually for mortgage contracts and quarterly for credit agreements.
- Number of specific product categories to report: At least 3 (including high-cost short-term credit and home credit loan agreements).
Key Takeaways
- The Consumer Credit (Regulatory Reporting) Instrument 2023 significantly updates reporting requirements for consumer credit firms.
- It emphasizes detailed and timely reporting of sales and performance data.
- The instrument aims to enhance regulatory supervision and market transparency.
- Firms in the consumer credit sector need to prepare for these new reporting standards by the 2025 deadline.
- The focus on high-cost short-term credit and home credit loan agreements highlights regulatory attention on potentially higher-risk credit products.
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