FCA finds firms have been working hard to embed the Duty, but there remains room for improvement.

By Becky Critchley and Charlotte Collins

On 20 February 2024, the FCA published more information on the Consumer Duty, including a publication highlighting good practices and areas for improvement. The FCA also used a related speech to remind firms of the 31 July 2024 deadline for applying the Duty to closed products and services, and for producing the first annual board report assessing

This annual publication explores some of the core focus areas for UK-regulated financial services firms in the year ahead. 2023 saw significant progress on the regulatory reform agenda, and many measures consulted on or reviewed as part of the Edinburgh Reforms will be finalised and/or implemented in the course of 2024.

We also saw the passing of the Financial Services and Markets Act 2023, many provisions of which have already come into effect and have made important changes to the

The Discussion Paper on the Advice Guidance Boundary Review examines how authorised firms can provide more support to customers.

By Rob Moulton, Nicola Higgs, Becky Critchley, and Charlotte Collins

The FCA has published a Discussion Paper (DP23/5) with the government on the Advice Guidance Boundary Review, which seeks views on the following three proposals:  

  • Further clarifying when firms can provide support to consumers without giving regulated financial advice
  • A new approach that would allow firms to provide support tailored to groups of people in similar circumstances
  • A new form of simplified advice that would make it easier for firms to provide affordable advice to clients with more straightforward needs and smaller sums to invest

The joint statement provides helpful guidance on the civil rights implications of considering an individual’s immigration status under the ECOA.

By Parag Patel, Justin Talarczyk, and Deric Behar

On October 12, 2023, the Consumer Financial Protection Bureau (CFPB) and the Department of Justice (DOJ) issued a joint statement (the Joint Statement) to clarify the civil rights implications of considering an individual’s immigration status under the Equal Credit Opportunity Act (ECOA). The Joint Statement is intended to assist creditors and borrowers in understanding these implications.

The ECOA and its implementing regulations (known as Regulation B) do not expressly prohibit the consideration of immigration status. However, they do prohibit creditors from using immigration status to discriminate on the basis of national origin, race, or any other protected characteristic.[i] The DOJ and CFPB are responsible for enforcing the antidiscrimination provisions of ECOA, which are crucial for ensuring fair, competitive, and nondiscriminatory lending markets.[ii]

The changes will significantly modernise the regime and enhance consumer protections.

By Nicola Higgs, Becky Critchley, Ella McGinn, and Charlotte Collins

The EU has adopted a new Consumer Credit Directive, known as CCD2, which repeals and replaces the existing EU consumer credit regime under the 2008 Directive. Member States are required to transpose CCD2 by 20 November 2025, and apply the new measures from 20 November 2026. CCD2 aims to keep pace with the digital transformation that has led to new credit products and services being offered which may currently be outside the scope of regulation, and different consumer behaviours and expectations. It is also intended to significantly enhance consumer protection, and to reduce in some respects the current lack of harmonisation across Member States that has resulted from unclear provisions in the 2008 Directive.

CCD2 makes wide-ranging changes to the existing regime, with the European Commission taking the view that the best way forward was to proceed with a wholesale revision of the consumer lending framework rather than continue to make incremental amendments to the 2008 Directive. In this blog post we outline some of the key changes to the regime.

A proposed rule would lower the maximum amount that large debit card issuers can charge merchants for each transaction.

By Arthur Long, Parag Patel, Barrie VanBrackle, and Deric Behar

On October 25, 2023, the Board of Governors of the Federal Reserve System (FRB) published a proposal that would lower the maximum interchange fee — transaction fees that a merchant must pay to card issuers whenever a customer uses a debit card to make a purchase — that a debit card issuer can charge per transaction (the Proposal). The Proposal would apply only to issuers with at least $10 billion in total consolidated assets (covered issuers). It would also establish a process and formula for updating the maximum fee amount every other year going forward, based on data voluntarily reported by covered issuers to the FRB.

As the pace of reform increases, we take a look at key developments and the timeline ahead.

Significant progress has been made on the Edinburgh Reforms since they were announced in December 2022, with developments gathering pace before the summer break. Given the breadth and speed of the reforms, now is a good time to take stock of where things stand and what we can expect in the months ahead. In this publication, we highlight some of the key developments and set out expected dates for future progress.

The Court held that banks do not owe this duty to customers deceived into instructing their banks to transfer money to fraudsters.

By Nell Perks and Callum Rodgers

On 12 July 2023, the UK Supreme Court handed down its highly anticipated judgment in Philipp v. Barclays Bank UK PLC [2023] UKSC 25, allowing the appeal brought by Barclays Bank UK PLC (Barclays).

The Court’s decision, which resolved longstanding questions about the nature of the Quincecare duty, clarified that the Quincecare duty only arises in cases in which there is fraud by an agent acting for the customer. As a result, it cannot apply in circumstances in which the relevant payment was authorised by the bank’s customer directly, so it has no application in APP fraud cases. The Court overturned the decision of the Court of Appeal, which had expressly held that that it is “at least possible in principle” that the Quincecare duty could apply to a “victim of APP fraud” on the basis that the Quincecare duty “does not depend on the fact that the bank is instructed by an agent of the customer of the bank”. [1]

With the implementation deadline looming, the FCA has set out some additional guidance for firms.

By Nicola Higgs, Becky Critchley, Effie Stathaki, and Charlotte Collins

With one month to go until the Consumer Duty (Duty) implementation deadline of 31 July 2023 (for new and existing products and services that are open for sale or renewal), the FCA is reminding firms of what they should be doing now to prepare.

The FCA has published the results from a survey of over 1,000 regulated firms that looked at how prepared those firms were three months in advance of the implementation deadline. The survey focused on smaller firms and sectors in which it appeared to the FCA that firms may have been less engaged and prepared; therefore, the findings are not necessarily representative of regulated firms more broadly. However, the FCA also set out some general expectations for all firms as they approach the implementation deadline.

By David Berman, Nicola Higgs, Rob Moulton, and Beck Critchley

With the Consumer Duty application date of 31 July 2023 fast approaching, this briefing reviews the ongoing obligations that apply to the boards of FCA-regulated firms under the Consumer Duty, including (1) embedding good customer outcomes, (2) ongoing monitoring, and (3) the annual assessment.

Authored by our Financial Regulatory specialists, the briefing also discusses the key roles of the Consumer Duty Champion and board members individually, and