![]() ![]() Many respondents argued strongly against this. Some respondents will see this as HM Treasury deciding to apply a watered-down regime to BNPL lenders even though they directly compete with fully regulated credit card lenders, which gives them an unfair advantage. Shortly before publishing its consultation response, HM Treasury announced that it intends to reform the CCA more broadly.Īrguably, this has softened the landing for HM Treasury's proposals to "tailor the application of" the CCA to BNPL and STIFC. However, others felt that the existing CCA requirements should be applied in full to BNPL with reform coming later, or that the government should undertake broader reform in parallel. Some respondents considered that a tailored approach to BNPL could be a test case for wider reform of CCA requirements. HM Treasury noted that many respondents to its consultation made the case for broader reform of the regulatory controls provided by the CCA that apply to all regulated credit agreements. Instead, any lender offering either STIFC or BNPL will need to be authorised by the UK Financial Conduct Authority (FCA), and will be required to comply with certain aspects of the regulatory regime, including carrying out affordability checks to ensure loans are affordable for consumers. However, respondents to the consultation pointed out that both types of product are rapidly changing and adapting to changes in consumer behaviour in the market, and that the lines between the two product types are increasingly blurred.ĭrawing STIFC into the regulatory perimeter at the same time as BNPL means that the government will not have to draw what it now realises is a tricky distinction between the two. The credit may also be used to finance subscriptions such as gym memberships or to purchase season tickets. STIFC: typically offered in-store, with the consumer taking out a one-off, higher-value agreement with the credit provider, who may be a third-party lender or the merchant.BNPL: credit usually taken out online with the consumer having an overarching relationship with a third-party lender, under which multiple low-value agreements are made with little transactional friction as a result.While exempt BNPL products and STIFC products rely on the same exemption under article 60F(2) of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 (RAO), the government drew a distinction between them in its initial consultation and suggested that BNPL should be regulated while STIFC should not. The regulatory perimeter will be extended to capture not only currently exempt interest-free buy-now-pay-later (BNPL) products but also currently exempt short-term interest-free credit (STIFC) products that are provided by third-party lenders. HM Treasury has also set out, in its consultation response (20 June 2022), more specific plans to bring exempt interest-free lending within the scope of regulation, following a much-anticipated consultation. To reset your passcode, please call 03 from the UK, or +44 2 from abroad to speak to a supervisor so we can reset your passcode for you.īefore calling, please make sure you are the Connect registered user, as we will need to confirm your identity and complete account security checks before we can reset your passcode.The government has announced (16 June 2022) that it intends to reform the Consumer Credit Act 1974 (CCA), with the long-awaited project expected to take place over an extended timeframe and more details on its approach anticipated later in the year. To reset your password, select the 'forgotten password' link on the Connect login page. If you would like to view your fees account or pay fees online, you will need to use our new online invoicing portal. This is our new data collection platform for gathering regulatory data from firms. If you are trying to submit regulatory data you will need to use RegData. suspicious transaction and order reports (STORs). ![]()
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