Prudential Regulation Authority
Conduct rule breaches - PRA publishes final notice and imposes financial penalty with respect to former bank CEO - 11 January 2024
The PRA has published a final notice (dated 10 January 2024) issued to Iain Mark Hunter, former chief executive (CEO) of Wyelands Bank plc (the Bank), fining him £118,808 for breaching three PRA conduct rules. The PRA considers that, between 7 March 2016 and 28 May 2020, Mr Hunter breached Individual Conduct Rule 2 (to act with due skill, care and diligence), Senior Manager Conduct Rule 1 (to take reasonable steps to ensure that the business of the firm for which the individual is responsible is controlled effectively) and Senior Manager Conduct Rule 2 (to take reasonable steps to ensure that the business of the firm for which the individual is responsible complies with the relevant requirements of the regulatory system).
According to the final notice, Mr Hunter failed to take reasonable steps to ensure, among other things, that the Bank had adequate systems and controls to identify, assess and manage connected parties' risks in relation to large exposures. Mr Hunter also failed to comply with the Bank’s internal policy to mitigate certain potential conflicts of interest and failed to take appropriate steps to verify the accuracy of statements he made about the Bank in two letters he wrote to the PRA. In addition to being CEO and holding SMF1, Mr Hunter was the Bank’s SMF4 (chief risk officer) and SMF2 (chief financial officer) for part of the relevant period.
As part of the settlement, Mr Hunter has undertaken not to apply for or perform any function relating to any regulated activity.
PRA Final Notice: Iain Mark Hunter
Press release
Financial Conduct Authority
Motor finance - FCA announces new work and publishes Policy Statement (PS24/1) introducing temporary changes - 11 January 2024
The FCA has published a statement announcing that it is undertaking work in the motor finance market. As part of this, it has published a Policy Statement (PS24/1) setting out temporary changes to the rules for handling motor finance complaints.
In 2021, the FCA banned discretionary commission arrangements (DCAs) which removed the incentive for brokers to increase the interest rate that a customer pays for their motor finance. The FCA explains that there have been a high number of complaints from customers to motor finance firms claiming compensation for DCAs before the ban. It has found that firms are rejecting most complaints because they consider that they have neither acted unfairly nor caused their customers loss based on the applicable legal and regulatory requirements.
The Financial Ombudsman Service (FOS) has considered some complaints rejected by firms and recently found in favour of complainants in two decisions relating to Black Horse Ltd and Clydesdale Financial Services Ltd. Claims have also been brought in the County Courts, some of which have been upheld. In light of this, the FCA is using its powers under section 166 of the Financial Services and Markets Act 2000 to review historical motor finance commission arrangements and sales across several firms. In the meantime, as set out in PS24/1, it is introducing a pause (with immediate effect and without consultation) on the eight-week deadline for motor finance firms to provide a final response to relevant customer complaints. The pause will apply to complaints about motor finance agreements where there was a DCA between the lender and the broker and will last for 37 weeks.
Consumers will have up to 15 months to refer their complaint to the FOS. This applies to complaints where the firm had sent a final response in the period beginning 12 July 2023 and ending 10 January 2024, or where the firm sends a final response between 11 January 2024 and 20 November 2024.
Feedback on the impact of the rules and the FCA’s approach to the provision of redress for harm caused by DCAs more generally can be sent up to, and including, 11 March 2024. The FCA plans to set out its next steps on this issue in the third quarter of 2024, and by 24 September 2024 at the latest (including whether it plans to extend the pause or make other changes).
FCA Policy Statement: Temporary changes to handling rules for motor finance complaints (PS24/1)
FCA Webpage
FCA press release
FOS Decision: Black Horse Limited (DRN-4188284)
FOS Decision: Clydesdale Financial Services Limited (DRN-4326581)
FOS Webpage
FOS Press release
