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Home > Prudential Regulation Authority > PRA statement on consumer credit

PRA statement on consumer credit

04 July 2017

The Prudential Regulation Authority (PRA) has undertaken a review of consumer credit lending, examining PRA-regulated firms’ asset quality and underwriting practices for credit cards, unsecured personal loans and motor finance (the ‘PRA Review’).  This follows a continued period of material growth in consumer credit, a lowering of pricing and extensions of interest-free offers. The Financial Policy Committee’s (FPC) June 2017 Financial Stability Report assessed the risks to financial stability from these developments. 

This Statement summarises the findings from the PRA Review, and outlines issues arising for PRA-regulated firms that provide consumer credit to consider and act upon.

PRA supervisors will write to firms with material exposures to consumer credit with a request to respond to this Statement.  Firms’ responses, together with the results of the 2017 stress-testing exercises, will inform firm-specific supervisory action by the PRA and system-wide policy decisions by the FPC.

Relevant information will be shared with the Financial Conduct Authority (FCA), and this Statement should be read in conjunction with the FCA’s forthcoming consultation on its Consumer Credit Sourcebook (CONC).

PRA statement on consumer credit