City minister reportedly voices Consumer Duty concerns

According to the Financial Times, he said it could damage the sector and trigger a wave of spurious lawsuits, with one industry insider describing him as “scathing” at a recent closed-door dinner with senior figures from the sector.  

He is said to be worried the Consumer Duty will impose new regulatory burdens on the financial services industry at a time when the treasury is trying to relax some city rules as part of a “Brexit opportunity”.  
Government insiders, meanwhile, said Griffith wants to avoid “compensation culture” with vexatious claims.

They added he wanted to ensure the Financial Conduct Authority (FCA) listened to concerns of the industry and ensured the new rules relating to the Consumer Duty were proportionate and clear.  

In response, the treasury declined to comment – however one government insider told the Financial Times said Griffith liked to have “frank and open” discussions with the sector. The treasury did not deny the minister was concerned about the duty and has raised it with the FCA.  

The FCA, meanwhile, declined to comment on any discussions with Griffith over his concerns – citing the confidentiality of its dealings with ministers. It said the duty would “encourage innovation while driving competition and growth in the financial services industry in the UK”.

 
The regulator introduced the Consumer Duty last year to set higher and clearer standards of consumer protection across financial services and require firms to “put their customers’ needs first” and will be made up of an overarching principle and new rules firms will have to follow.