The Review

Following 10 years of FCA regulation, the introduction of the Consumer Duty and moves across the industry, regulators and government to avoid duplicating regulation, we believe now is a sensible time to review the FLA Lending Code and the role it plays in delivering good practice standards for consumers.  (See Briefing Paper on the review).

The FLA Lending Code has been in place for over 30 years and forms part of FLA members’ commitment to delivering good standards of practice to their customers. Adherence to the Code is a requirement for all CFD and MFD Full members, which includes 84 firms who together provided £115 billion of consumer credit lending in 2024.

The Code was introduced before FCA regulation and many of the provisions were adopted by the FCA when drafting the rules included in CONC (the FCA’s Specialist Sourcebook for consumer credit) The Code has been updated every couple of years, to reflect the changing regulatory landscape and to make it easier for consumers to access and read. The Code also includes measures which go beyond FCA regulation, eg, the requirement for motor dealers to take the SAF Test. In the past, the FCA has also asked us to include consumer protection measures in the Code, where it has been quicker for us to introduce them, eg, rules on Unsolicited Credit Limit Increases.

Scope

The Code Review will explore:

  • The role of the Code in setting good practice standards alongside FCA Regulation and the Consumer Duty.
  • To what extent does the Code duplicate existing regulatory and consumer protection requirements?.
  • Whether an alternative model or approach is required; and
  • The implications of any change in approach on consumers and FLA members (existing and prospective).

 

Who will be involved?

The Review will include interviews with:

  • CFD & MFD members (Full) (interviews and a survey)
  • The independent Lending Code Group (which overseas compliance)
  • Code Compliance Officers
  • Stakeholders,
  • The FCA
  • Government, and
  • Consumer groups

An Interim Report will be produced in Q2 2025, followed by a Final Report and recommendations in Q3 2025

We look forward to hearing your views as part of this Review.

automobilemag.co.uk
Automobile Magazine UK

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