Overview

This bill amends the Financial Services and Markets Act 2000 and related legislation. Key changes include introducing a duty of care for financial services providers towards consumers, regulating interest rates for "mortgage prisoners," and clarifying the application of the Consumer Credit Act 1974 to certain credit activities. It also makes adjustments regarding data retention under market abuse regulations and the provision of cash, and incorporates considerations of the 2050 carbon target.

Description

Duty of Care for Financial Service Providers:

A new "duty of care" is introduced, preventing firms from profiting by exploiting consumer vulnerability, behavioral biases, or limited choices. The Financial Conduct Authority (FCA) must implement this by April 6, 2022.

Mortgage Prisoners:

The FCA is mandated to cap Standard Variable Rates (SVRs) for mortgage prisoners (those unable to switch lenders) at no more than 2% above the Bank of England base rate. It must also ensure access to new fixed-rate deals for eligible mortgage prisoners.

Consumer Credit Act 1974:

The bill clarifies the application of the Consumer Credit Act 1974 to certain credit activities that become regulated activities under the Financial Services and Markets Act 2000.

Data Retention:

The bill removes the five-year data retention limit for personal data under the Market Abuse Regulation.

Cash Provision and Payment Services:

Amendments clarify when the provision of cash does not constitute a payment service under the Payment Services Regulations 2017.

Climate Change Considerations:

Amendments incorporate the 2050 carbon target from the Climate Change Act 2008 into relevant FCA rulemaking processes, although with temporary exemptions until January 1, 2022.

Government Spending

The bill doesn't directly specify government spending figures. However, implementing the new regulations, particularly those related to the FCA's rulemaking and enforcement, will likely incur costs for the government. There may be additional indirect impacts due to changes in the financial services sector.

Groups Affected

• Financial Services Firms: Will face new regulations regarding consumer protection, data retention, and potentially increased compliance costs.
• Consumers: Will benefit from increased protection against exploitation and potentially lower mortgage interest rates (mortgage prisoners).
• Mortgage Prisoners: Will experience the most direct benefit, potentially gaining access to more affordable mortgage products.
• FCA: Will have increased responsibilities for rulemaking and enforcement.

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