Regulations
By James Thorp
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Lenders Brace for Impact. Major players like Santander Consumer Finance and Black Horse already started setting aside cash…
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What Went Wrong. The mess started with something called discretionary commission arrangements.
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Sunday Showdown. The FCA's timing feels deliberate - announcing after markets close gives everyone the weekend to…
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The Financial Conduct Authority drops its motor finance redress strategy March 30 after markets close.
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Car finance companies have been sweating bullets since the FCA first hinted at widespread redress last year.
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Industry sources can't agree on what's coming.
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Some think the FCA will go soft, maybe limiting payouts to recent cases or capping compensation amounts.
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"We're preparing for multiple scenarios," said one senior executive at a top-five lender who didn't want to be named.
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Smaller finance houses are basically praying the FCA shows mercy. Many operate on thin margins and can't absorb massive compensation bills like the big banks can.
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Lloyds Banking Group and Barclays both face scrutiny over their motor finance arms. Both banks got hammered during the PPI scandal years ago and really don't want a repeat…
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The mess started with something called discretionary commission arrangements. Car dealers could bump up interest rates and pocket the difference, but customers rarely knew about…
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Martin Lewis has been banging the drum for affected consumers, calling the old system "a scandal hiding in plain sight.
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Consumer groups compiled horror stories of families paying thousands extra without realizing it.
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The regulator's been cagey about eligibility criteria. Will it cover all loans or just the worst cases?
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Market analysts from JP Morgan and Goldman Sachs have been working overtime trying to model potential outcomes for their clients.
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