Financial Services UK – competition and regulation – what it means for us
In 2012 we commented that regulation in the credit union sector had been enhanced with joint regulation by the Prudential Regulatory Authority and the Financial Conduct Authority.
Citysave continues to fully meet all regulatory requirements and is in regular dialogue with its regulators. As agreed at the last AGM, a new rule book has been applied for and since approved by our regulators.
We have applied for Version 2 status, though our regulators have been very slow in their assessment and this remains under discussion. This status would allow us to offer larger and secured loans and allow us more and better options to manage our financial assets.
As a credit union we remain very tightly regulated and we will continue to lobby for more changes we deem are necessary to level the playing field in the financial services sector. Unfortunately our regulators tend to be slow in reacting and we therefore expect to have to wait some time for most of the changes needed.
Looking elsewhere in the financial services sector, we are very concerned to see the exponential growth in high cost lending in a sector which is self-regulated. Its practices are causing considerable hardship for a growing number of vulnerable people in our community. Despite promises made by trade organisations in the past to improve what they do, the Office of Fair Trading now admits that there have been no improvements at all.
We know that from April 2014 this sector will be regulated by the Financial Conduct Authority, but based on the most recent proposals presented by the regulator, it is clear that the regulation of this particular sector will remain very lax in comparison to our own.
As a leading campaigner for the protection of our members and our community, Citysave is active in demanding better regulation of high cost lending and debt management companies. Financial services should be run professionally with the care of the consumer foremost in mind.
It makes our position in Birmingham very challenging, as we try to compete with both the Banks (who seem to often circumvent regulation) and the high cost lenders (who have no regulation being enforced). In addition we are impacted by debt management companies who are not subject to any regulation at all. Whatever we plan to do, most of our activities are being limited by significant barriers from legislative and regulatory forces.
In reality we are relatively powerless to influence what is happening in the wider financial services sector in Birmingham, but what we can do is to continue to campaign on behalf of our local community and to drive for the abolition of the poverty premium that affects so many people.