FCA Feedback to the Interim Working Group’s (IWG) Final Report

Key Take Aways

1. The FCA welcomes the final report from the Interim Working Group (IWG), recognising its foundational contributions to enhancing the credit information market.
2. The formation of the Credit Reporting Governance Body (CRGB) is seen as a crucial step towards delivering improved data quality, fostering innovation, and supporting financial inclusion.
3. The FCA emphasises the importance of a clear focus on outcomes, notably how governance decisions impact consumer access to credit and overall market competition.
4. The IWG has reached consensus on the Board representation of the CRGB and its role in promoting a balanced stakeholder influence.
5. Support is given for establishing advisory councils, particularly a dedicated consumer representatives’ council, to ensure consumer voices are integrated into governance.
6. The FCA advocates for quantifiable measures to monitor progress against the CRGB’s three primary themes: data quality, innovation and competition, and financial inclusion.
7. The approach to defining the CRGB’s authority via contract law is deemed pragmatic, while ongoing reviews will scrutinise its effectiveness and decision-making processes.
8. The FCA endorses the CRGB’s role as a self-regulatory organisation, distinct from regulatory bodies, with ongoing engagement being vital for its success.
9. The utilisation of Memoranda of Understanding (MoUs) is planned to formalise co-operation between the CRGB and government/regulatory bodies; early engagement is encouraged.
10. The FCA highlights the importance of proportionate breach reporting and the need to clarify processes around non-compliance and the role of the FCA in enforcement.
11. There is support for decision-making safety mechanisms that promote inclusivity and safeguards, with a focus on avoiding delays and inefficiencies.
12. Commercial credit data governance is recognised as an area for future growth, with the ‘grandfathering scheme’ proposed as an initial transitional measure to ensure oversight continuity.

Key Statistics

• The transitional arrangements from the IWG are already underway, with the new CRGB incorporated in its name as the Credit Information Governance Body (CIGB).
• The FCA expects the transition to be completed by the end of Q3 2025, after which it will cease funding the initial resource.

Key Discussion Points

• The role and structure of the CRGB as a self-regulatory entity focused on operational standards rather than regulatory enforcement.
• Effectiveness of the CRGB’s outcomes framework, particularly how it aligns with diverse stakeholder interests and promotes positive market impacts.
• The importance of stakeholder participation, including consumer representatives, in developing and implementing industry remedies.
• The need for clear governance, safety, and challenge mechanisms within the CRGB’s decision-making processes.
• The significance of early and ongoing engagement between the FCA, the CRGB, and government/regulatory bodies through MoUs.
• The impact of the CRGB’s governance on commercial credit data, including the transitional ‘grandfathering scheme’.
• The FCA’s support for the CRGB’s approach to breach management and internal compliance protocols.
• The importance of quantifiable metrics to monitor progress across the three key outcome themes of the CRGB.
• The need for proportionate public notifications and engagement on breaches of CRGB rules and the role of the FCA in such instances.
• The potential for CRGB’s activities to reduce the need for FCA regulatory perimeter expansion, while recognising the limits of legislative change.
• The approach to reviewing the CRGB’s effectiveness and decision-making structures, including timing and scope of future reviews.
• The importance of holistic governance considering interactions between consumer and commercial credit data sectors, ensuring strategic oversight across data domains.

Document Description

This article is a formal response from the FCA providing comprehensive feedback on the final report from the Interim Working Group (IWG) regarding the future governance of the credit information market. It covers the FCA’s support for the establishment of the Credit Reporting Governance Body (CRGB), highlights key areas of focus such as governance structure, stakeholder engagement, decision-making safety, and data quality, and discusses next steps towards implementing these reforms to enhance market integrity, consumer outcomes, and competition.