The Treasury Committee publish responses to the SME Finance report from the Government and the Financial Conduct Authority (FCA).
The Treasury Committee published its report on SME Finance on Friday 26 October 2018. Its conclusions included:
- Financial Services Tribunal needed to handle complex SME disputes
- Expanding the Ombudsman’s remit to handle SME cases should not be rushed through
- Treatment of some SME customers has been ‘scandalous’
- Commercial lending should be regulated to protect SMEs
- Treasury should develop strategy to overcome SME’s unwillingness to apply for finance
- Brexit is opportunity for capital requirement regime to better support competition
- RBS’ Alternative Remedies Package should be administered in as timely a manner as possible
The Committee has today published responses to the report from the Government and the Financial Conduct Authority (FCA). Commenting on the response, Rt Hon. Nicky Morgan MP, Chair of the Treasury Committee, said:
“The Treasury Committee has argued that loans to SMEs should be regulated. Whilst the FCA has noted that it is reasonable for Government and Parliament to assess what it regulates, the Government has flat-out – and wrongly – refused to bring commercial lending into regulation.
“Committee members believe that any legislative change in the regulatory perimeter would attract support across the House of Commons and is something that the House could constructively pursue now.
“The FCA must be given the powers to provide protection to SMEs now. If the Government continues to bury its head in the sand, scandalous events such as those at RBS’ GRG could re-occur.
“The Committee also called for the introduction of a Financial Services Tribunal for SMEs to settle disputes with their bank that will be too complex for the FOS under its new remit.
“There is cross-party support to provide enhanced protections and improved access to justice for SMEs, so it’s disappointing that the Government will not pursue our recommendations.
“We will continue to scrutinise SME finance, regulation and redress.”