FCA To Introduce Reforms To UK Overdraft Market

On 7 June 2019, the Financial Conduct Authority ("FCA") confirmed that it is introducing reforms in relation to the overdraft market, set out in its policy statement PS19/6. The aim of these reforms is to make overdrafts simpler, fairer, and easier to manage and will protect the millions of consumers that use overdrafts, particularly more vulnerable consumers. According to the FCA, the changes represent "the biggest overhaul to the overdraft market for a generation." In particular, the FCA has announced that it is:

• stopping banks and building societies from charging higher prices for unarranged overdrafts than for arranged overdrafts;
• banning fixed fees for borrowing through an overdraft – calling an end to fixed daily or monthly charges, and fees for having an overdraft facility;