Andrew Bailey, chief executive of the Financial Conduct Authority (FCA), has said that the regulator has sought advice from its American counterparts regarding the motor finance industry, according to reports.
At a speech on Thursday, Bailey said the motor finance industry was undergoing a ‘structural change’. Bailey told reporters: “My hunch is there has been. It has become more like the US market,” noting it had moved to more of a secured finance market.
The comments follow the Bank of England’s ‘Financial Stability Report’ for June 2017, in which the Financial Policy Committee (FPC) warned that the increase in consumer credit, including in motor finance, must be watched closely.
Bailey told reporters that car finance was “quite a big part of the story,” and said the FCA had begun talks with US regulators with greater experience of the motor finance market.
The FCA chief said that the conduct of motor finance lenders must be looked at, to ensure customers are aware of the terms.
Last month, a report by the Financial Ombudsman found that personal contract purchase (PCP) was a growing area of complaint. The report highlighted a case study in which a customer breached her PCP’s allotted mileage by 7,000 miles, claiming it was not made sufficiently clear.