‘It’s not you, it’s me’. ‘I’m looking for something new’. While these may be common break-up excuses, today’s break-up marks the start of something beautiful. Find out why I’ve fallen back in love.
Today, the Financial Services Authority is officially toast. The regulator begins to enact the plans set out in the Financial Services Bill.
The regulator officially begins its split into two new bodies, the Financial Conduct Authority and the Prudential Regulation Authority.
For us Watchdog campaigners, this is a bit of a milestone.
Banks, building societies, insurers and major investment firms will now be supervised by both the FCA and PRA. By splitting its functions, the regulator will no longer need to keep so many plates spinning.
New love for consumers
The FCA will monitor the day to day conduct of these firms i.e. the stuff that matters to you and me. Are insurers’ policies suitable to be on the market? Are the banks treating us fairly and providing the services we need?
The FCA can focus on giving consumers some much needed TLC.
While we won’t see a radical change overnight, today does herald a change in approach for the organisation we rely on to keep the financial services industry in line.
We’ve been working to make sure the Financial Services Bill passes through parliament without any watering down of the new consumer protection powers.
Hands off our super complaints
There was, however, a problem with the wording in the Bill. It wasn’t clear that bodies that represented the financial services, such as trade bodies and banks, wouldn’t be able to claim ‘super complaint’ powers.
Thankfully, Yvonne Fovargue MP, noticed this needed clarification and secured a mini-victory for consumers. She persuaded Treasury minister, Mark Hoban, to amend the Bill to make it clear that super complaint powers shouldn’t be given to the financial services industry.
This was an important cue. Super complaints were designed as a consumer protection tool for organisations like us, Citizens Advice and Consumer Focus to bring to light issues of mass consumer detriment. You may remember our super complaint against ‘rip-off’ card surcharges, for example.
The power to make super complaints is a vital tool for consumer groups as they can be used to make the regulator investigate issues. Super complaints were never intended to be given to bodies that represent the industry. We were happy the government agreed and commited to making sure super complaints are limited to organisations that represent consumers.
Getting the Bill right
So now you know why today is so important, I’m sure you’ll now be sharing my excitement. And luckily for us, this isn’t all we have to look forward to in the next few weeks. Next up is the report stage of the Bill, which is where MPs will agree on what was decided in Committee. It then goes to the Lords where the whole scrutiny process starts again.
While we’re generally happy with the Bill, there are still a few things that we think need to be improved upon to make sure the mistakes of the past aren’t repeated, such as the FCA being transparent and publishing its agenda and board minutes.
Our primary focus is to avoid another bank charges test case, where banks have been allowed to charge disproportionate charges. The Bill needs to make clear that the FCA will have the power to prevent hidden charges, otherwise we’ll all feel like we’re being ripped-off.
Are you hopeful that the FCA will work in the interest of you and me and bring the banks into line? Or do you think this love affair will be short lived?