The Bank of England, in the shape of the PRA, has warned that there will be no wholesale scrapping of red tape following Brexit.   Sam Woods, Chief Executive of the Prudential Regulation Authority, stated that “… whilst the UK’s withdrawal from the EU will change many things, it does not change the PRA’s statutory objectives. With that strongly in mind, supervisors will maintain the normal supervisory approach and focus on the biggest risks at each firm. For some businesses, Brexit will be a key risk and will, justifiably, warrant supervisory attention – we must not lose sight of risks as structures and business models change, or as activities move around or adapt.”*

For those who expected a different approach, this may have come as an unwelcome surprise, but it shouldn’t have.   As a colleague of mine once remarked, the UK does not only embrace EU regulation, it often “gold plates” it.

Originally, the FSA (as it then was) focussed on “risk and impact” following the failure of the regulatory authorities to comprehend the dangers inherent in the lending free-for-all which culminated in the run on Northern Rock and the 2008 credit crisis.

Change, along with death and taxes, is certain, but in recent years the pace of change has increased enormously.   From March 17, 2017, the rules regarding regulatory references for Senior Managers and staff in the Certification Regime came into force. The Certification Regime applies to staff in roles that can cause ‘significant harm’ to either the firm or its customers. This includes, for example, mortgage advisers. It makes sense, as was noted at a recent event put on by one of the ASTL’s associate members, Simply Biz, “firms don’t do wrong, it’s the individuals within a firm that do so”.

The EU General Data Protection Regulation (GDPR) goes into effect on May 25, 2018. With its emphasis on privacy and consumer rights, GDPR will require changes in the way many companies manage, store, transfer, and delete customer data.

The growing awareness of the problems building up in the consumer credit sector, most recently in the motor vehicle finance area, will inevitably lead to additional regulation as regulatory authorities seek to avoid another crisis.   This may well be closing the stable door after the horses have bolted, but there is no doubt in my mind that consumer credit regulation has only just started to get serious and that the FCA has the same agenda for the financial services sector as a whole.

Businesses need to be aware of this and not drag their heels in the vain hope that, come the day the UK leaves the EU, regulation will suddenly disappear.

*Remarks prepared for the May 2017 Building Society Association (BSA) Annual Conference (


Benson Hersch, CEO of the ASTL


A version of this article appeared in the July 2017 edition of Specialist Lending Solutions Alert