April 25 (Reuters) - Close Brothers have decided not to launch a legal challenge against the UK financial regulator's 9.1 billion pound($12.31 billion) compensation scheme for consumers who were
Close Brothers, Santander say they will not challenge Britain's car finance redress scheme
UK Banks Respond to FCA Car Finance Redress Scheme
Overview of the Compensation Scheme
April 25 (Reuters) - Close Brothers and Santander do not intend to challenge the UK financial regulator's 9.1 billion pound ($12.31 billion) compensation scheme for consumers who were allegedly mis-sold car finance, the banks' spokespersons said on Saturday.
Industry Acceptance and Participation
• Sky News, which reported the news first, said the banks would join Barclays in accepting the terms of the Financial Conduct Authority's redress programme.
Financial Impact and Industry Review
• The development comes as banks and vehicle manufacturers with finance divisions, which have collectively set aside billions of pounds for compensation, review whether they need to adjust their provisions or legally challenge the scheme.
Lloyds Banking Group's Position
• Lloyds Banking Group had said it will also not make a legal challenge against Britain's car finance redress scheme, the Financial Times reported this month.
Details of the FCA's Directive
• The FCA last month told the country's motor finance industry to compensate motorists after inadequately disclosing commissions and contractual ties between lenders and car dealerships over a 17-year period until 2024.
Statements from Close Brothers and Santander
Close Brothers' Statement
• “Close Brothers does not intend to challenge the FCA’s motor finance redress scheme. While there are elements of the scheme that we disagree with, after careful consideration we believe that the existing scheme offers a quick, clear and certain route to resolving this matter for all relevant parties,” a spokesperson said in a statement.
Santander's Statement
• Separately, a Santander spokesperson said: "We have decided not to challenge the schemes and will now focus on their implementation. We will continue to work constructively with regulators and policymakers to seek to improve the competitiveness of the UK in the interests of all our customers, taxpayers and investors."
Additional Information
($1 = 0.7391 pounds)
(Reporting by Preetika Parashuraman in Bengaluru; Editing by Andrea Ricci, Rod Nickel)
