A proposal requiring the Financial Conduct Authority (FCA) to explore financial inclusion issues to protect vulnerable consumers has successfully passed through the House of Lords.
The amendment to the Financial Services and Markets Bill, which proposed that the FCA should ‘have regard’ to financial inclusion, was put forward by Fair By Design and the Financial Inclusion Commission.
The Bill will now return to the House of Commons.
Late last week Fair By Design tweeted: “Campaign win! Our amendment to the Financial Services and Markets Bill calling on the FCA to ‘have regard to financial inclusion’ has won in the UK House of Lords.”
The Financial Inclusion Commission also tweeted: “The Commission is delighted to see the UK House of Lords back our amendment with Fair By Design for the FCA to ‘have regard to financial inclusion’.”
Fair By Design aims to end the ‘poverty premium’ where there are extra costs placed on people with low incomes when paying for essential products and services.
The Financial Inclusion Commission is an independent body of experts from financial services, businesses, the charity sector, academia and parliamentarians from all major political parties.
It aims to make financial inclusion a top political priority in order to meet the needs of the millions excluded in the UK.
“The Bill will now return to the House of Commons where we hope the amendment will be supported by MPs. Ultimately [the] amendment is an opportunity for the regulator to routinely and properly explore financial inclusion issues to protect vulnerable consumers. We hope it is backed by MPs,” Fair By Design said in a follow-up tweet.
Martin Coppack, a director at Fair By Design, added: “Massive win…for financially excluded people across UK. The UK House of Lords backed Fair by Design and UK Financial Inclusion’s campaign amendment for new requirement for the FCA to at least consider needs of [the] poorest in their work.”
Maria Booker, head of policy at Fair By Design, also said: “We know that however wonderful the Consumer Duty may be, it doesn’t require the FCA to consider those who can’t access the credit, loans etc they need in the first place which is why Fair By Design has been campaigning hard for this amendment.”
According to statistics from the Financial Inclusion Committee, 28% of UK adults or 14 million people have experienced a direct negative effect on their income due to the coronavirus pandemic (as of May 2020).
“Financial exclusion remains a significant challenge for 21st century Britain which prides itself on being a global leader in financial services,” the committee said.
It said that 12.5 million UK adults have little or no confidence in their ability to manage money and 22% of all adults in the UK have less than £100 in savings.
And one in five adults would not be able to cover more than one month of living expenses if they lost their source of income, with 16% needing to borrow to pay for essentials as they had run out of money.