Financial Services and Markets Act 2000 (Consumer Credit) (Designated Activities) Order 2014
Lord Sharkey Excerpts(10 years, 10 months ago)
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Lord Sharkey (LD)
My Lords, I shall speak to both orders. The first takes up little more than a page, while the Explanatory Memorandum attached to it takes up 49 pages. The second order takes up 30 pages and the Explanatory Memorandum for that also takes up 49 pages, but is essentially the same text as the first one. That is not a complaint: the Explanatory Memorandum is a model of its kind—it is clear, thorough and indicates clearly areas of doubt or uncertainty.
There is one area of doubt or uncertainty arising: the effect on SMEs—not as providers of credit but as customers of credit providers. The impact assessment estimates the cost of the measures over 10 years at £336 billion and the benefit at £689 million—an estimated net benefit of £353 billion. However, the impact assessment does not say how this net benefit is distributed. That is my first question: are SMEs net beneficiaries or is all the benefit delivered elsewhere?
The impact assessment also makes it clear that it expects a shrinking of the credit market. It estimates that 9,000, or 20%, of credit organisations will exit the market. It is true that these organisations represent only a small percentage by volume of total credit, but is this lost lending concentrated in the SME sector? That is my second question to the Minister. We know that net lending to SMEs continues to decline. Can the Minister provide some general reassurance that the measures before us will not make the position worse?
The note in paragraph 53 on page 13 of the impact assessment makes the point that the FCA’s most effective regulatory tools and framework to be brought about by these orders will be,
“effective in tackling known consumer detriment occurring in the non-mainstream lending market such as: payday loans, credit brokerage, debt management and home collected credit”.
That is an important improvement and I welcome it, especially as it will apply to payday loans. However, at first reading there seem to be some areas missing from the list. The impact assessment notes in paragraph 25 on page 8, as a rationale for intervention,
“that the market is not functioning as well as it should and the regulatory regime cannot keep pace with the market”.
However, as far as I can detect, no explicit mention is made anywhere in the orders or the Explanatory Memorandums of crowdfunding or peer-to-peer lending. As the Minister knows, these are rapidly growing credit areas, and ones that offer additional opportunities for SME funding. Can the Minister confirm for the Committee that crowdfunding and peer-to-peer lending will fall within the ambit of these orders? I think I heard the Minister say that that is the case for peer-to-peer lending, but I should like to know whether it is also the case for crowdfunding.
Before I conclude, I should like to ask the Minister a little more about the effects of these orders on payday lenders. The Minister has previously confirmed elsewhere that under the terms of the EU e-commerce directive, the UK has no power to cap the cost of payday loans extended by companies based in the EEA and trading only electronically in the UK. However, I notice in paragraph (5)(e) on page 16 of the second order that the authority has the power to prohibit the entry into credit agreements by an EEA authorised payment institution if that institution,
“engages in business practices appearing to the Authority to be deceitful or oppressive or otherwise unfair or improper (including practices that appear to the Authority to involve irresponsible lending)”.
Does this provision apply to payday lenders based in the EEA and operating only electronically here in the UK?
Lord Tunnicliffe (Lab)
My Lords, I welcome these two orders. It is the duty of Her Majesty’s Opposition to study secondary legislation and then to oppose it where we find errors and faults, but I have to say that I have not been as successful as the noble Lord, Lord Sharkey, in finding questions to pose to the Minister, so at least my words will give him a little time to collect together his notes on those technical areas. While we welcome the orders, my honourable friend in another place did ask one or two questions which seemed to be answered satisfactorily. As far as I can tell, the orders do their job. With the permission of the Committee, I should like in a sense to celebrate these orders because they represent the last hurdles of effecting the transfer of responsibilities for consumer credit from the OFT to the FCA. Over the past many months, we have all been concerned about the consumer credit market, in particular its grey areas and payday lending.
I, too, have studied all 49 pages of the impact assessment, although I did not find the same inconsistencies as the noble Lord. I did pick up an implication that the resources to be devoted to the area seem to be tripling from around £10 million per annum to £30 million, and I would be grateful if the Minister could confirm the extent to which new resources are being made available for this new activity. What does this represent in terms of resources and people at the FCA devoted to the consumer credit market? Will it involve the transfer of people from the OFT? Will it involve new and perhaps more capable people working in this market? Will there be a change in attitude and culture on the part of those working in this area?
As has been pointed out, there are some detailed areas, but the really serious evil here is the loan sharks, the rogue lenders and the payday loans market. That market is pretty worrying at every level, from the one-person operator through to major organisations. It involves probably some of the most vulnerable consumers in the land, who are people making decisions in very difficult and stressful circumstances. If ever a market needed intelligent, proactive government regulation, it is this one, and I hope that what the Government have designed will do it.
I would be grateful if the Minister could say a few words about how the regulators will be more proactive. The documentation makes the point that the FCA can be forward-looking and create regulations quickly. I would be grateful if the Minister could expand on that and give me some reassurance—in response to a point made by a colleague—that the new unit will be able to strangle products at birth; in other words, will be sufficiently proactive to sweep the market for the emergence of new products and move quickly to kill them before they do the social harm that we know they can do.
One of the aspirations of these changes is to bring rogue firms under control, which I think we all welcome. The problem is that it might increase opportunities for illegal operations. I feel as though I am in a pantomime now and saying, “Look behind you”, because notes are at the Minister’s right hand. To what extent will the unit work with the police where it sees the early emergence of illegal operations and stamp them out before they can create the evil which we know happens in communities under stress?
Taxation: Personal Thresholds
Lord Sharkey Excerpts(10 years, 11 months ago)
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Lord Newby
No, I simply do not agree with the noble Baroness. The Government are considering a number of measures which will help people on low incomes, of which a potentially significant increase in the minimum wage is perhaps the most significant.
Lord Sharkey (LD)
My Lords, now that our economy is growing again, can the Minister say what more the Government can do to help those who need it most, in particular the long-term youth unemployed?
Lord Newby
My Lords, the most important thing the Government can do as the economy grows is to ensure that the macroeconomic framework is conducive to greater growth. There has been a 300,000 fall in the claimant count within the past year, so that is the single biggest thing that the Government can do to promote the continued reduction in unemployment and long-term unemployment. Youth unemployment has been falling now for five quarters. It is not falling fast enough but a raft of measures, including improved vocational education and an expansion of the apprenticeship scheme, have been designed specifically to tackle that long-standing issue.
Financial Services (Banking Reform) Bill
Lord Sharkey Excerpts(11 years ago)
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Lord Sharkey (LD)
Lord Sharkey (LD)
My Lords, I rise to move Amendment 21 and to speak to Amendment 20. I congratulate the Government on bringing forward their amendment to cap the total cost of payday loans. I am grateful to the Minister and to his officials for meeting me to discuss the issue and for providing us with copies of the letters between the Financial Secretary and the FCA.
Amendment 20 clearly has the right intent but it raises several important questions as do the letters between the Treasury and the FCA. Nowhere in the Government’s amendment or in their correspondence with the FCA is there any mention of the problem now discussed by the Minister of multiply sourced simultaneous loans. The Financial Secretary says in his letter to the FCA that the main aim of the cap is to ensure that PDL customers do not pay excessive charges for borrowing and to minimise the risk to those borrowers who struggle to repay and to protect them from spiralling costs, which make their debt problem worse. In short, far fewer payday loan customers should get into debt problems.
Simply imposing a cap, as I think the Minister was acknowledging, will not produce this result if borrowers can take out multiply sourced simultaneous loans. If borrowers can do this, any cap will be ineffective in controlling indebtedness. My amendment, as the Minister has said, proposes a ban on these multiply sourced loans, as is the case in Florida. I think I heard the Minister say that the FCA will consider the problem caused by multiply sourced simultaneous loans when he considers the mechanism of the cap. I see the Minister is nodding in agreement that that is the case.
My amendment also proposes a ban on rollovers, as the Minister has said. That is also the case in Florida. I remind noble Lords that in Florida no loan may be taken out until all previous loans have been settled in full and then only after a 24-hour cooling off period. Rollovers are banned in Florida because they are the chief way of luring borrowers into a spiral of increasing debt. Here in the United Kingdom, 28% of all payday loans are rolled over and 50% of payday loan revenue, according to the OFT, comes from these loans. The FCA does not appear to understand the problem with rollovers. In its October proposals it suggested that rollovers be limited to two. It provided no evidence to suggest that this would have the desired effect and it is pretty obvious, I think, that it would not. Five days ago, the financial services consumer panel recommended in evidence to the FCA that rollovers be limited to one. I think the case for rollovers being banned is very strong. Will the FCA explicitly consider banning rollovers and will it publish its cost benefit analysis—the one the Minister talked about—of the relative merits of banning rollovers and limiting them to one or two only?
The Treasury letter to the FCA raises other questions. The Financial Secretary states:
“The Government is also committed to ensuring that you can access the information you need to design the cap. The Government will bring forward secondary legislation to allow you to collect information to support your new duty as soon as possible”.
The Minister has tried to explain what some of this information might be, but I should be grateful for more clarification on exactly what the FCA is going to be looking for and also confirmation that the Government will publish a draft of the proposed secondary legislation well before bringing it to Parliament.
In his reply to the Financial Secretary’s letter, Martin Wheatley of the FCA says that it is possible for firms in other EEA member states to provide a payday loan service through the internet to UK consumers within the electronic commerce directive. He went on to say that this is not something that the FCA can mitigate. What does that mean? Does it mean that the FCA cannot cap such transactions and, if it does, what is the point of the Government’s Amendment 20? The Financial Secretary’s letter to the FCA makes reference, as the Minister has done, to data-sharing practices. It says:
“There are a number of regulatory interventions in the market which may help to create the right conditions to ensure the cap is effective. For example, the Government shares your concerns that data sharing practices may not be supporting good consumer outcomes”.
This all seems rather opaque and quite a long way from plain English. Does this mean that the Government want credit agencies and lenders to pool data? Does it explicitly include the consideration of establishing a real-time lending database? I should be grateful if the Minister could confirm to the House that the answer is yes in both cases.
The whole matter of a cap turns on effective implementation and the evidence suggests overwhelmingly that we need a real-time database of loans to do exactly that, but the level of the cap is also critical. Amendment 20 requires the FCA to secure,
“an appropriate degree of protection for borrowers against excessive charges”.
There is no attempt in the amendment or in the correspondence to define “excessive” or to give guidance about how a judgment of what is excessive is to be arrived at. This seems an important and, perhaps, critical defect in the amendment. Surely the FCA must be given some guidelines in defining excessive for the purpose of fulfilling its duty. For example, we already know that payday loan borrowers in Florida pay, at most, one-third of the costs that such borrowers pay here in the United Kingdom. Will the FCA consider this kind of disparity in its definition of “excessive”? Will the Government set out in writing and publish the guidelines that the FCA must follow, and the factors it must consider, in reaching a definition of what may count as “excessive”?
I turn briefly to subsection (1B) of the Government’s amendment. It states:
“Before the FCA publishes a draft of any rules … it must consult the Treasury”.
I accept that the FCA will consult widely and not just with the Treasury before it publishes these draft rules but I am concerned about what happens after the publication of such draft rules. The FCA’s performance to date is not an obvious guarantee that any such draft rules will be what is required under the Government’s amendment. For its October publication of the draft rules, which the Minister has referred to, the FCA considered all the available evidence and proposed to allow two rollovers but no cost cap of any kind. A month later, the Treasury considered the same evidence and decided that it was sufficient to require the imposition of a cap. In other words, the Treasury appears to believe that the FCA got it wrong, which does not inspire confidence in the judgment of the FCA.
For that reason, and for reasons of openness and transparency, I believe it is important that there is the opportunity and time allowed for detailed public comment on whatever draft proposals the FCA comes up with and, in particular, that Parliament is given the opportunity formally to scrutinise the FCA draft proposals. I should like to know whether the Government will commit to allowing that opportunity and that time for detailed public comment and for allowing Parliament that opportunity to scrutinise FCA draft proposals.
Finally, I should point out that nowhere in Amendment 20 or in the two letters that we have seen is there any mention of a limit on the amount of the loan or of a minimum or maximum term. Will the Government confirm that the FCA will explicitly consider both a limit on the amount and on the term of any payday loan? I repeat that I welcome the Government’s intention in bringing forward Amendment 20 and I look forward to hearing the Minister respond to the questions I have asked. I beg to move.
Lord Higgins
My Lords, I want to make two very brief points. The amendment refers to “charges” and to “high-cost credit”. However, the words “interest” or “the rate of interest” appear nowhere in the amendment. I would have thought that there was some case for explicitly including that in the Bill, because the use of the other, rather wider, expressions leaves too much scope for the situation to be fudged. I would be grateful if my noble friend would say something about that.
We have been talking very much about payday loans and their provision; but it has become apparent that a number of charges made overall by clearing banks sometimes can approach, if not exceed, the limits charged by payday loan providers. I would like my noble friend’s assurance that the organisation will take account of that also and, if necessary, deal with the problem of very high overall charges—particularly with regard to unauthorised overdraft charges, for example—made by clearing banks as well as by payday lenders.
Lord Sharkey
Before the noble Lord sits down, perhaps I may prompt him to address the question of payday loan companies operating outside the UK but in the EEA trading in this country. Do they or do they not? Will they be subject to the cap or not?
Lord Newby
My Lords, this is a complicated area that we have just begun to start looking at. In order to minimise the extent to which overseas operators might be able to operate in this area, we need to take our time and do the job properly. It is another contributory argument for doing the job in a deliberative manner.
Lord Sharkey
My Lords, I am grateful for the answers that the Minister has given, with the possible exception of the last one. I should be grateful if, as these deliberations take place, he would consider writing to us to tell us the latest position on these people trading from outside the country in the country. If that turns out to be possible, we need a radical rethink of exactly what we are about today. Leaving that to one side, I am reassured by the answers that my noble friend the Minister has given but I particularly want to stress that absolutely critical to this working at all is a real-time database. This is not about data sharing or the old system of batch processing. It will work only if real-time data processing and real-time lending information are available to the regulator and the lending companies. I hope that as the FCA proceeds it will come to an understanding that that is absolutely the case and an absolutely necessary requirement. Having said all that, I beg leave to withdraw the amendment.
Banking: Parliamentary Commission on Banking Standards
Lord Sharkey Excerpts(11 years ago)
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Lord Sharkey (LD)
My Lords, I start by warmly congratulating the noble Lord, Lord Carrington of Fulham, on his excellent and insightful maiden speech. He set a formidably high hurdle for those of us who follow him. I also congratulate the most reverend Primate the Archbishop of Canterbury on securing this debate. I congratulate him and his fellow commission members on the reports that they have produced and the use to which they have put them. I know that the commission no longer exists, but listening to its members in the House in the debates on the banking reform Bill, is surely conclusive proof that there is life after death.
I know that it is conventional to praise the work of our committees—sometimes before going on to qualify that praise—but I will make it plain from the start that I have an unreserved and unqualified admiration for the work of the commission and the reports that it has produced. I am struck by the force of its analytical inquiry. I am struck by the force of its criticisms and by the essential simplicity of its recommendations. I am struck, too, by the clarity and simplicity of the language in which all this was expressed.
The commission’s reports deal with all aspects of the banking crisis and many of its recommendations have been adopted by the Government. The focus and debate has, quite rightly, been on legislation to produce better regulation. Although banking culture formed a prominent part of the commission’s report, it played, perhaps, a less prominent part in our debate. It is the issue of banking culture on which I wish to focus my remarks.
The commission was clear that there was, and indeed is, a problem with the culture in banking. It is worth quoting paragraph 754 from volume 2, which states:
“Poor standards in banking are not the consequence of absent or deficient company value statements. Nor are they the result of the inadequate deployment of the latest management jargon to promulgate concepts of shared values. They are, at least in part, a reflection of the flagrant disregard for the numerous sensible codes that already existed. Corporate statements of values can play a useful role in communicating reformist intent and supplementing our more fundamental measures to address problems of standards and culture. But they should not be confused with solutions to those problems”.
In other words, fine talk will not solve real problems—and the problems are very real.
It is a sad reflection that there is no need to rehearse the consequences of the banks’ corrupt culture in any great detail; it is all too appallingly familiar. Nevertheless, we should not forget the scale of the problem with the ethics and behaviours of the banks. There was the mis-selling to SMEs of products that were completely inappropriate; there were the LIBOR and the EURIBOR scandals; there were the HSBC money-laundering scandals; and there is now the possibility of another huge scandal if the allegations about RBS’s treatment of small businesses prove true. All these were bad enough, but much worse was the PPI mis-selling scandal, because it was the clearest example of a deliberate exploitation by the banks of their customers.
John Lanchester wrote in the London Review of Books recently:
“PPI was about banks breaking trust by exploiting their customers, not accidentally, but as a matter of deliberate and sustained policy. They sold policies which they knew did not serve the ends they were supposed to serve and in doing so treated their customers purely as an extractive resource”.
There is a common thread running through this criminal, or near-criminal behaviour. It is a kind of contempt that the banks have had for their own customers. It is clear that the banks have not behaved in the interests of their customers—nor, for that matter, in the interests of the rest of us. The banks are almost unique in doing this, and they are certainly unique in getting away with it. Many huge and complex commercial concerns exist, but they do not systematically loot their customers.
My own long experience as an adviser to the senior management of very large, complex, commercial companies suggests a reason for this. One factor common to all the multinationals I have worked with was a fundamental belief in competition—a word that has so far not played much of a role in our debate. Competition in the service of customers was the key. That belief was not just a form of words, or just the shared view of senior management. It was the belief that defined the company at every level and in everything it did. It formed a strong cultural bond, where the obvious question to ask about anything was: is this really in the interests of our customers? No one in our banks asked this question about the introduction of PPI.
What makes the belief in serving the interests of customers a culture, and not just jargon, is competition. In all normal enterprises, large and small, what keeps companies focused on their customers is competition. If you do not serve the interests of your customers, your competitors certainly will—or at least they will if you operate in a competitive marketplace.
I have heard it argued that our large banks really did want to compete with each other. If that was ever true, it is certainly not true now. They do not compete and they probably will not because they do not need to do it to make money, and they make more money for themselves by not competing. Why do they not need to compete? It is because they effectively form a cartel. The EU Commissioner for Competition said yesterday:
“What is shocking about the LIBOR and EURIBOR scandals is not only the manipulation of the benchmarks, which is being tackled by financial regulators worldwide, but also the collusion between banks which are supposed to be competing with each other”.
He added:
“If you take the opportunity to see the conversations between these cartel traders, you will be appalled”.
A cartel means no competition, and no competition means no need to serve the customer, who does not have many real choices anyway.
It is now a bit easier to switch banks, but where do you go? Which bank is better than the other, which is different, and which has senior management that will put your interests firmly before its own? As long as there is a banking cartel there will be no competition, and as long as there is no competition there will be no reliable driver of sustained cultural change. As long as banks are too big to fail, as long as they are too big to manage, and as long as there are too few of them to be competitive, the chances of real and sustained cultural change are very low.
Of course we will see, as we are beginning to see, banks trying to say plausible things about customer focus. We will see new codes of conduct, new mission statements and reassuring advertising. But the sad fact is that without real competition, the banks have no real and sustained incentive to change, and the consumer has no real choice and no real chance. There is only one way to fix this, and that is to break up the banks. They are too big to fail, so let us make them smaller. They are too big to manage, so to make them easier to manage, let us make them smaller. There are not enough banks to really compete, so let us make more by breaking them up.
I realise that we have had to give priority to fixing the obvious regulatory failures, and we are well on the way do doing this. Now we should turn our attention to failures in culture and in competition. Unless we do this, I fear that in 10 years’ time our successors will be looking at yet another series of banking scandals, and at yet another PCBS report on our failures in both culture and competition.
Financial Services (Banking Reform) Bill
Lord Sharkey Excerpts(11 years ago)
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Lord Eatwell
That is because I think the distinction between commercial banking and investment banking is relevant in this case. One would expect investment bankers to behave honestly and in an appropriate manner in their business transactions. I would not expect an investment banker necessarily to display a duty of care and certainly not a fiduciary responsibility whereas I really would expect a commercial banker to exercise those responsibilities in all circumstances when dealing with families and small businesses.
Lord Sharkey (LD)
Before the noble Lord sits down again, I ask for a brief clarification. Ring-fenced banks may well have dealings with local authorities and pension funds, but I think that under the terms of the Financial Services Act 2012 and the FSA rules these are not legally customers; they are eligible counterparties. Did the noble Lord mean to exclude local authorities and pension funds from the protections he sets out in his amendment?
Lord Eatwell
I am very grateful to the noble Lord for his comments. I had overlooked that point. Once the House has accepted this amendment, we can move on, perhaps at Third Reading, to add the elements that the noble Lord suggests.
Financial Services (Banking Reform) Bill
Lord Sharkey Excerpts(11 years ago)
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Lord Sharkey
“Part 4ARegulation of High Cost CreditRegulation of high-cost credit agreements
(1) The FCA shall, within 6 months of the passing of this Act, include among the regulations governing high-cost, short-term credit agreements provisions to—
(a) restrict such loans to one outstanding loan per customer at any given time;(b) provide for a 24-hour cooling off period between loans in which no new loan may be entered into less than 24 hours after the settlement in full of a previous loan;(c) establish at the lender’s cost a real time database of loans outstanding to be used in the enforcement of paragraphs (a) and (b);(d) restrict the amount of any loan to a maximum face value of £300, exclusive of permissible fees; (e) restrict any transaction fees and charges of any kind to a maximum of 10% of the face value of the loan plus a £3 verification fee;(f) restrict the term of any loan to between 7 and 31 days;(g) allow the borrower to extend the loan term for an additional 60 days beyond the due date without any additional charges of any kind;(h) require borrowers who avail themselves of the extension in paragraph (g) to undergo credit counselling with a designated professional counsellor or organisation and to abide by the plan established to retire the debt.(2) For the purposes of this section—
“high-cost credit agreement” means a regulated credit agreement as defined by section 137C of the Financial Services and Markets Act 2000 (as inserted by the Financial Services Act 2012) that provides for—
(a) the payment by the borrower of charges of a description from time to time specified by the FCA; or(b) the payment by the borrower over the duration of the agreement of charges that, taken with the charges paid under one or more other agreements which are treated by the FCA’s rules as being connected with it, exceed, or are capable of exceeding, an amount specified by the FCA;“charges” means charges payable, by way of interest or otherwise, in connection with the provision of credit under the regulated credit agreement, whether or not the agreement itself makes provision for them and whether or not the person to whom they are payable is a party to the regulated credit agreement or an authorised person; “authorised person” has the same meaning as in the Financial Services and Markets Act 2000.”
Lord Sharkey (LD)
My Lords, this amendment has been somewhat overtaken by events. As little as four weeks ago, the Government were claiming in this Chamber that there was insufficient evidence for a cap on the cost of payday loans. They said:
“The Government do not believe that current evidence provides sufficient justification to support a cap on the cost of credit”.—[Official Report, 23/10/13; col. 1109.]
On Sunday, the Chancellor underwent a kind of Damascene conversion. He is now convinced that there is sufficient evidence for a cap. That is very good news. Surely it would be unkind to point out that there was no more evidence available to him on Sunday night than there was four weeks ago.
After the Chancellor’s announcement that there would be a mandatory cap, there was another late intervention. At nine o’clock last night, like all of us, I was e-mailed a letter from the noble Lord, Lord Deighton. Without elaboration, it says that,
“the balance of evidence has tipped in favour of a cap”.
He says that the Government,
“will give the FCA a clear duty in legislation to use the powers we have given it to implement a cap”.
He continues:
“The FCA must ensure that it designs a cap that works in UK consumers’ interests and fits the UK market”;
but he goes on to say that the FCA will draw upon,
“the analysis and findings of the Competition Commission, whose investigation of the payday lending market is currently underway”.
The investigation is indeed under way, but it has a statutory reporting date of 26 June 2015. That is far too late. It means that any cap is unlikely to be in place before the end of 2016. That would mean millions of the most financially troubled people continuing to pay millions of pounds to PDL companies entirely unnecessarily. The Chancellor, in his interview on the “Today” programme on Monday morning, said clearly that installing a cap could happen in parallel with the Competition Commission investigation. I spoke to the noble Lord, Lord Deighton, about this issue earlier today. At the close of our conversation, he committed the Government to have the cap fully implemented by the end of January 2015. This seems to me to be reasonable and to allow the time necessary to put all the systems in place. I would be grateful if the Minister would explicitly confirm to the House the commitment made to me by the noble Lord, Lord Deighton.
The main difficulty this evening, of course, is the lack of any concrete proposals from the Government. We cannot know exactly what the Government will propose. This is a fundamental problem because the devil is very much in the detail when it comes to the regulation of payday loans. We can only make a little progress tonight, but it would help to hear the Minister confirm to the House that they will by legislation oblige the FCA to impose a cap on the total costs associated with any payday loan.
It would help to hear the Minister say that the FCA will be instructed to look again at the restrictions on rollovers. The FCA has said that it is minded to restrict rollovers to two. This is completely wrong. Some 28% of all borrowers have one or more rollovers, and a full 50% of payday lending revenue comes from rolled-over loans. Rollovers should be banned. We should do here what they have been doing in Florida for the last 11 years. In Florida, no loan may be taken out until any previous loan has been settled in full; and no new loan may be taken out within 24 hours of the settlement of a previous loan.
Will the Minister confirm that he will instruct the FCA to consider this system? In Florida there is a real-time lending database in operation. This database prevents rollovers. It also prevents borrowers having multiple simultaneous loans. Will the Minister confirm that we will have a similar real-time database here in the UK? Will he confirm that the FCA will be instructed to consider banning multiple simultaneous loans?
There are another couple of features of the Florida regulatory system which should be closely examined on the basis that we should use them here unless there is overwhelming evidence to the contrary. First, in Florida, any loan may be extended by 60 days without any additional charge at all. That is certainly not true here, but it should be true here. Secondly, any borrower in Florida who extends a loan by 60 days is required to undergo approved credit counselling and to abide by the plan agreed to retire the debt. This helps stop the spiral of increasing debt and provides a way out. We should have this here in the UK too.
The fact is that the Florida regulatory system is a model for payday loan regulation. Perhaps this is what the Chancellor suddenly realised on Sunday night. I ask the Government to ask the FCA to consider all aspects of the Florida regime for adoption here in the UK. At its simplest, in Florida, if you borrow £300 for 30 days you pay back £333. Here, if you borrow £300 for 30 days from Wonga, you pay back £397. That is three times as much—a wholly unjustifiable transfer of cash from the poor to the rich.
In closing, I simply ask the Minister to confirm that when we come to the capping amendment at Third Reading, we can operate under the less restrictive Committee-stage rules, as I think is entirely appropriate given the late stage at which the amendment is being introduced. I beg to move.
Lord Selsdon (Con)
My Lords, I support the noble Lord, Lord Sharkey, but I speak from a slightly different point of view. After so many years in your Lordships’ House, from time to time certain problems are raised with me when people have nowhere else to go. I want to talk about the link between the payday loan and credit and other things, particularly unemployment.
Take the situation at the moment of the young unemployed, or with some sort of weighting allowance in some form or other, who want to buy a mobile telephone or an iPad or something like this. They go along to any one of the suppliers, which then offers them a package that means they do not need to pay £500 up front but can pay it later. They sign up to something that they do not quite understand and then find that they cannot meet the necessary payments. They may have various allowances but, before they know it, the pressure builds up. So what starts as a £500 transaction can multiply into £1,000 fairly quickly. They cannot afford to pay the bill, so they go to a payday loan company—I will not mention their names—which, without the necessary research, offers them facilities at an exorbitant rate of interest. What starts with the wish to buy an iPhone or something of that sort for £500, when they have not got the money up front, can turn into nearly £5,000.
Lord Newby
Absolutely, I am very happy to do that. I hope that the rules would send that message very clearly, but I am very happy to reinforce it.
I go back to the terms of the amendments. I am concerned that some of the provisions could make it more difficult for a consumer to cancel an agreement—for example, requiring borrowers to sign for cancellation of a CPA. I am confident that the FCA’s proposals will give consumers control with respect to CPAs and in managing their repayments. I strongly support the noble Lord in seeking to protect consumers using the high-cost credit market and ensuring that they know their rights. However, I believe the objectives of transparency and protections for consumers are already provided for by the new regulatory regime; the FCA has already set out the action that it proposes to take in this area.
I turn to the amendment proposed by the noble Lord, Lord Sharkey. His proposal would require the FCA to implement a number of rules from the Florida model of payday regulation, including a requirement for a cap on credit. I can give the noble Lord at least some of the assurances that he seeks in terms of the FCA considering the Florida approach to regulating payday lenders very closely, as it decides how to design a cap on the total cost of payday loans for the UK market and make sure that it works effectively here. It will consider rollovers and look, for example, at the experience of Florida with a real-time database.
While I completely support the noble Lord’s desire to learn lessons from other countries’ experience, I have some doubts as to whether it is as straightforward as he thinks to simply import almost an entire regulatory framework from another jurisdiction. The UK has a very different market from other countries, and it is right that the rules governing regulation of payday loans in the UK reflect our own unique national characteristics. The FCA will be charged with doing that, building on the international evidence and examination of the UK market, and drawing on the Competition Commission’s analysis among other things. Therefore, while I share the noble Lord’s commitment to ensuring the UK consumers are protected when they borrow from high-cost lenders, I hope that he will agree that the best way to achieve that is through development of evidence-based rules that are tailored to protect UK consumers. We have a clear action plan to deliver this objective.
The noble Lord, Lord Eatwell, raised the question of the content of the amendments and the relationship between the Government, in setting policy in this area, and the FCA—where the Government stop and the FCA begins. I heard very clearly what he said. The exact nature of the amendment that we will debate at Third Reading is currently being formulated, and I shall make sure that his point is very much in the minds not only of Ministers but of officials as they set about that task.
With those assurances about the amendment that we will introduce, I hope that the noble Lord will feel able to withdraw his amendment.
Lord Sharkey
I was struck by the point made by the noble Lord, Lord Eatwell, that the Government must at some point surely say how the FCA is to arrive at a rate or an amount for a cap and by what criteria the cap should be determined. I am sure that they will want to revisit that whole notion again at Third Reading.
As to Florida, I am encouraged by what the Minister says. I make the overriding point that the Florida system has been operating for 11 years; it is simple, it is easy to understand and it works. What we have here now does not work, is not simple and is not easy to understand—and it costs three times as much as Florida. That is a powerful reason for looking carefully at Florida and assuming that there is something that we can really learn here, no matter the differences between the two jurisdictions. However, I am very grateful for the Government’s decision to cap the total cost of payday loans, and I look forward to a further discussion of the issues at Third Reading under Committee stage rules. In the mean time, I beg leave to withdraw the amendment.
Banking: Lending
Lord Sharkey Excerpts(11 years, 1 month ago)
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Lord Newby
My Lords, as the noble Lord knows, there was a review about whether there should be a formal good bank/bad bank split of RBS. The Government decided that the cost and disruption of doing this was not justified. However, as the noble Lord says, the bank has itself decided to make an internal split, enabling it to have a greater focus on lending and on dealing in a more orderly way with many loans which will not be repaid or will be only partially repaid. Many of these are related to the property sector.
Lord Sharkey (LD)
My Lords, in March it was noted that lending to SMEs had shrunk by 25% in real terms since 2009 and it has continued to decline since then. The Business Bank is intended to address the problem and BIS forecasts that the first SME loan portfolio guarantees will be in place by the end of this year. Can the Minister update the House on progress?
Lord Newby
My Lords, in respect of SME lending more generally, gross lending is now rising. The picture is clouded by the fact that a lot of SMEs are still paying back loans, so the net position is not as positive, but net lending is down by a much lower amount. As far as lending to SMEs as a whole is concerned, the picture is improving. The Business Bank was launched on 17 October and it aims to support economic growth by bringing together public and private sector funds to improve financial markets for SMEs. Very recently it announced its first commitment of £45 million from the initial £300 million investment programme.
Banking: Co-operative Bank
Lord Sharkey Excerpts(11 years, 1 month ago)
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Lord Sharkey
To ask Her Majesty’s Government to what extent their aims of producing more diversity in banking and of reforming banking culture will be affected by the change in ownership of the Co-operative Bank.
Lord Newby (LD)
My Lords, the Co-op Bank is negotiating a deal on its capital with its creditors. It will cease to be fully mutually owned, but will continue to compete in retail banking markets. The Government’s reforms will make the banking sector safer, more competitive and diverse. We are implementing the recommendations of both the independent and parliamentary banking commissions. These fundamental reforms will be unaffected by the change of ownership for the single bank.
Lord Sharkey (LD)
The fact is that the Co-op Bank will now be owned by a couple of vulture funds, which I suppose is diversity of a sort. What advice would the Minister give customers who are looking for ethical values in retail high street banking?
Lord Newby
My Lords, the Co-op is undoubtedly having a significant change in ownership, but one would hope that even vultures will be able to see that the Co-op’s USP is its particular ethical stance. Its strength appears to me, at least, to be very much in that direction. So for the development of the Co-op, one would hope that they would see continuation of those traits being in their own interests, as well as those of anybody else. Of course, there are other mutuals that the discerning customer can put their money with; the Nationwide is very successful, as are other building societies. We must be clear on the difference between “for profit” and “ethical”. I would not want to brand every other high street bank as unethical just because they are also making a profit.
Financial Services (Banking Reform) Bill
Lord Sharkey Excerpts(11 years, 1 month ago)
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Lord Sharkey
“High-cost credit agreements
(1) The Secretary of State shall by order provide for each local authority in England and Wales to regulate high cost credit agreements entered into by any person whose registered address for the purpose of obtaining credit is within the area of that authority.
(2) An order under this section shall—
(a) set a maximum level for—(i) the amount of any loan;(ii) the rate of interest that may be charged; and(iii) the associated fees that may be leviedas part of any such agreement;(b) limit the number of times and specify the terms on which such an agreement can be rolled over for any individual to whom this section applies; and(c) require the lender to demonstrate that the borrower has no outstanding high-cost loans.(3) Any local authority choosing not to exercise its powers of regulation once an order is made under this section shall publish a report setting out its reasons for not doing so, and shall make a similar report in each subsequent year in which it chooses not to exercise its powers of regulation.
(4) For the purposes of this section—
(a) “high-cost credit agreement” means a regulated credit agreement as defined by section 137C of the Financial Services and Markets Act 2000 (as inserted by the Financial Services Act 2012) that provides for—(i) the payment by the borrower of charges of a description from time to time specified by the FCA; or(ii) the payment by the borrower over the duration of the agreement of charges that, taken with the charges paid under one or more other agreements which are treated by the FCA’s rules as being connected with it, exceed, or are capable of exceeding, an amount specified by the FCA;(b) “charges” means charges payable, by way of interest or otherwise, in connection with the provision of credit under the regulated credit agreement, whether or not the agreement itself makes provision for them and whether or not the person to whom they are payable is a party to the regulated credit agreement or an authorised person;(c) “authorised person” has the same meaning as in the Financial Services and Markets Act 2000.(5) An order under this section shall be made by statutory instrument subject to approval by resolution of each House of Parliament.”
Lord Sharkey (LD)
My Lords, I will briefly argue in favour of four propositions. The first is that payday loan charges are much too high; secondly, that the current action on payday loans, although it is welcome, will not fix the central problem; thirdly, that we already have plenty of evidence for how to fix this problem; and fourthly, it is possible to act now to benefit payday loan customers and there is no need to wait.
The first proposition is that payday loan charges are much too high, and there is probably no need for me to argue the point extensively in this Chamber. Many Members of the Committee will agree that the scale of the charges amounts to exploitation of the poorest and the most desperate, and perhaps even that these charges are an affront to social justice, or even a sense of common humanity. In fact, there are established markets where the payday loan business flourishes with much smaller charges, of which the United States is a prime example. I shall talk more about the regulatory regime in the United States in a moment.
The second proposition is that the current action, although it is welcome, will not fix the central problem. The FCA, which will take over regulatory responsibility for the sector in April next year, published a consultation paper earlier this month. The paper noted that:
“We consider that the high-cost short-term credit sector poses a potentially high risk to consumers in financial difficulty”.
It put forward five key proposals that would require lenders to,
“assess the potential for a loan to adversely affect the customer’s financial situation; limit the number of times they can seek payment using a continuous payment authority; limit the number of times a loan can be ‘rolled over’; inform customers about sources of debt advice before refinancing a loan; put risk warnings on loan adverts”.
All these requirements were broadly welcomed, but there was no proposal to address the very high cost of payday loans themselves. The FCA confined itself to saying only that:
“After we start regulating consumer credit, our supervision teams will consider firms’ fees and charges practices to decide if we need to intervene further”.
That was it, but it is these fees and charges that are the cause of the present hardship and difficulty. Why wait until next April? The charges are obviously too high. They are lower elsewhere, and they could be lower here, too.
My third proposition is that we already have plenty of evidence about how to fix the high charge problem. I have heard it said that, in fact, self-regulation by payday loan lenders is the best way forward. Quite apart from the fact that it is difficult to see this bringing down costs, the evidence at the moment is that self-regulation is not working. Earlier this month, BIS published a large-scale and comprehensive review of how well the payday loan industry had been complying with its revised July 2012 customer charter and codes of practice. What BIS found was this:
“Overall, the results of the survey show that 9 months after the industry said they would comply fully with the charter and the improved codes of practice, self-regulation is not working effectively and compliance with key provisions is not good enough … lenders appear to fall down significantly in meeting the requirements … overall in relation to rollovers, Continuous Payment Authority (CPA) and the treatment of customers in financial difficulty”.
Lord Sharkey
I am happy to acknowledge the achievements of the noble Lord, Lord Mitchell. As the noble Lord, Lord Eatwell, may know, when I spoke to the noble Lord, Lord Mitchell, about my amendment, he said that, if he could, he would be happy to speak in support—qualified support, no doubt.
The question of local authorities is a red herring. I would happily trade off local authorities for the FCA if the Government would agree to the substance of the amendment. I do not intend to pursue the notion or the comments that have been made about local authorities by the noble Lord, Lord Eatwell, and my noble friend the Minister.
I am puzzled by the notion of there not being sufficient evidence to introduce a cap. I am hard put to understand how the situation in the United States—we mentioned only Florida but there are 17 other states with low interest rate caps; these systems work well—does not constitute something close to entirely sufficient evidence. I note in passing that Australia introduced the same system last year and there is evidence available from there as well. I also note in passing that this issue about payday lenders being able to avoid any cap by writing in additional charges is explicitly dealt with in the regulations that exist in Florida and the other states that cap these things. It is the total cost of any charges connected in any way with the loan that is capped; it is not just the interest rate.
I listened carefully to what my noble friend the Minister said and I will read it carefully again tomorrow morning. If we can dismiss the notion of local authorities for the moment, there may be merit in returning to this issue and of getting something done more quickly than April and afterwards so that we do not continue to have people taking on these loans at appalling costs. There may be merit in returning to that on Report but in the mean time I beg leave to withdraw.
Financial Services (Banking Reform) Bill
Lord Sharkey Excerpts(11 years, 2 months ago)
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Lord Sharkey
“Competition and diversity
The Secretary of State must bring before Parliament within 6 months of the passing of this Act proposals to increase competition and diversity in banking by imposing upon any bank in which Her Majesty’s Government is a majority shareholder a duty to apply the following principles—(a) the principle of regionality whereby each branch of the bank is permitted to take on new deposits, open new accounts and make loans to companies or individuals only when the registered addresses of these companies or individuals is within the defined geographical area of operation of that branch;(b) the network principle whereby regional groups of local branches are autonomous in terms of governance, publish separate reports and accounts, collaborate with other branches to share central services such as the provision of systems, marketing, specialist financial products, liquidity management and wholesale funding while also maintaining appropriate mutual guarantees and self-regulation within the group to ensure that failing local management and branches are dealt with within the group with no recourse to the taxpayer;(c) the stakeholder principle whereby the governance of regional groupings of local branches explicitly includes stakeholder representation, comprising local businesses, customers, suppliers and employer and elected employee representatives;(d) the social purpose principle whereby a broader social purpose is embodied either in the banking licence of the bank or other statute so that the directors do not have a duty to maximise profit, but to ensure the profitability and financially sustainability of their local operations in supporting the economy of their regions of operations and financial inclusion in those regions, and nothing in this social purpose principle requires making loans that could not reasonably be expected to be repaid.”
Lord Sharkey (LD)
My Lords, this is a probing amendment. It is designed to allow us to consider what progress we are making in generating competition and diversity in our financial system, and what steps we might take to accelerate this process.
From the start, the Government have recognised that there is a problem with the levels of diversity and competition in the financial system. The coalition agreement of May 2010 commits the Government to,
“bring forward detailed proposals to foster diversity, promote mutuals and create a more competitive banking industry”.
A year later, the Commons Treasury Committee published a report entitled Competition and Choice in Retail Banking. This report showed competition to have declined. Part of the evidence for this decline was in the simple increase in concentration of financial services; part of the evidence was in the decline in customer satisfaction. The report notes:
“Competition policy should maximise the benefit to the consumer. Our evidence suggests that this is not happening. The large banks perform poorly on many consumer satisfaction surveys relative to other providers. Survey evidence consistently shows customers are dissatisfied by service quality and the lack of real choice on offer in the marketplace. In a genuinely competitive market we would expect firms which provide superior service, choice or prices to gain significant market share from rival firms, but we see little evidence that this is happening”.
The committee is there describing in restrained and measured language a cartel-like situation. In other words, there are too few banks, and those are too big and too similar. The banks themselves did not agree with that view. The committee noted:
“The large banks have told us that ultimately consumers will benefit from lower prices resulting from the economies of scale and synergies provided by larger more diversified banks. We agree that there are economies of scale/minimum efficient scale in retail banking which will ultimately limit the total number of firms in the market. However, we question whether the need for economies of scale justifies banks having a 30% share of the market or whether such benefits, if they exist, will be passed onto consumers in a market where competition is deficient. Indeed, such economies of scale benefits are likely to be outweighed by the negative impact on competition by those providers who are perceived to be ‘too big to fail’”.
In addition, there are two other factors. First, as Andy Haldane has noted, there is a case for concluding that over $100 billion in assets, banks actually become less efficient. They are too big. Secondly, the evidently corrupt culture we have seen in some of our banks is a clear symptom of a lack of real competitiveness and is probably chiefly caused by this lack. It is competitiveness—real competitiveness—that keeps companies honest, or at least very much more honest than some of our banks have been. I rehearsed all their recent and shocking failings at Second Reading, and I will not do so again now, but I will again point out that the PPI scandal is the clearest possible indication of non-competitive, cartel-like disregard for the interest of consumers. Banks sold policies which they knew did not serve the ends they were supposed to serve, and they did it on a gigantic scale. This would not happen in a truly competitive market.
This is the situation today: there is a lack of real competition and of real diversity. A study by the University of Oxford published in April this year by the Building Societies Association shows that across both the savings and mortgage markets diversity has dropped by about 20% since 2004. The report acknowledges some hopeful signs and says that in recent years the decline appears to have levelled off, but it concludes:
“If the Government is to fulfil its commitment to foster diversity it will need to do more to ensure that a variety of organisations are able to operate in financial services markets in the future, with the aim of reversing the decline in diversity... since 2004”.
It also says, bluntly:
“Consumers are likely to benefit less from competition than a decade ago and if another crisis were to hit, the system is more vulnerable than it was”.
The Government are clearly alive to the problems of competition and diversity and to their importance. Many initiatives, legislative or otherwise, have been aimed at bringing about improvements in both, but there is nothing in place which will produce any significant improvements in any near future, and there may be nothing in place at all that will really transform the competitive landscape. Divestment of branches and regulation of P2P and crowdfunding are welcome, and easing of the difficulties in acquiring a banking licence is very welcome indeed, but the plain fact is that we start from a position where the large banks have 80% or so of the market in the UK and have behaved in a cartel-like manner. The measures in place or in progress will surely not reduce this figure by much in the next 10 years. In fact, I would be very interested to hear if the Treasury has a medium-term forecast of market share of the big banks. Perhaps the Minister could help with that in his reply.
This 80% dominance of our big banks is the cause of the lack of diversity in our financial system, which is now very much less diverse than it was 50 years ago. The German savings bank association pointed out in May this year that 70% of German banks are mutually owned or not for profit. It also noted that in the UK just 3% of banks are local, compared to 34% in the USA, 33% in Germany and 44% in Japan.
The question is, of course: what can be done to speed up the progress of competitiveness and diversity? I do not think the answer to this question should be “Nothing”, or “We do not need to”, or “We can wait for some technological change to eventually produce the results we look for”.
I have spent almost my entire commercial life working with very large multidivisional and multinational corporations. They are fiercely competitive because they are committed to securing even the smallest possible profitable increase in market share. They are committed to doing this by being dedicated to serving the interests of their customers because they feel, no matter how big they are, the relentless threat posed by very much smaller, more agile and more innovative competitors. We need all these things, especially the last, to be true of our banking system.
I think any really substantive answer to the question of the lack of competition and diversity will have to address directly the lack of the true regional or local banking and the absolute dominance of one type of banking. This amendment sets out a proposal to do just that. We can do more and do it more easily with banks we own than with the other banks. We have an opportunity to use our ownership to begin to bring about the transformative changes we need.
The amendment proposes that the Secretary of State must bring before Parliament a plan to increase competition and diversity by imposing on banks we own a duty to apply the principles of regionality, networking, stakeholder involvement and social purpose. The principle of regionality is to restore real localism to banking, so that banks really know their areas and their customers in a way which is emphatically not the case right now. The network principle is to give regional groupings of branches a degree of real autonomy and some real identity. The stakeholder principle is to give representation in the banks’ activities to local businesses, customers, suppliers, and employees as well as employers. The social purpose principle is to explicitly give banks a local social purpose and responsibility. It is these principles that we need to see in operation if we are to introduce any real competitiveness, any real innovation, and any real diversity into our banking system.
Lord Phillips of Sudbury (LD)
My Lords, I, too, broadly support these two amendments. It is encouraging that every speaker so far has taken that broad point of view. As my noble friend Lord Sharkey said in opening this debate, the amendment in his name and that of the noble Lord, Lord Glasman, is a probing amendment. I hope that the noble Lord, Lord Eatwell, was advancing Amendment 102 in the same spirit. I very much hope that the Minister will say that he will take away the contributions made, so that we can come back together on Report with an amendment that answers some of these concerns.
Perhaps the most striking statistic that we have had was that given by the noble Lord, Lord Eatwell, who said that in Germany 80% of banking is provided by local regional banks whereas here the figure is only 3%. I think that was said by the noble Lord, Lord Eatwell, or perhaps it was the noble Lord, Lord Glasman.
Lord Phillips of Sudbury
I am sorry, it was my noble friend. That is a stunning statistic. The fact that some of the small German banks failed in the great crisis seems to reflect a strength and virtue as compared with the situation in this country where, but for the injection of in excess of £80 billion of taxpayers’ funds, as far as I can see the whole banking system would have failed. The big clearers would have gone to the wall—that is the truth. We do not even have a market banking system that complies with the supposed basic virtues of a capitalist system: when they were tested, they could be held up only by immense government input.
Lord Newby
My Lords, as far as immorality is concerned, later we will deal with amendments on the reversal of the burden of proof and on the new criminal offence which will be available should banks behave in a grossly immoral way. That is the way to deal with the narrow point my noble friend makes. The whole question of the culture of the banks is addressed only partially in the legislation because it is by definition a cultural issue. We are taking very significant steps to regulate individual senior managers and hold them to account for what they do in a way that has never been the case in the past. Again, that is quite a revolutionary change. Regarding the specific point raised by the noble Lord, Lord Flight, I believe that local authorities at least can bank wherever they choose, but I will look into the point and write to him. I simply do not know what the position is.
Lord Sharkey
My Lords, I will be brief because I see that I am holding back an avalanche of 158 government amendments. There have been a lot of strong, very well argued and diverse views, but there have also been some general themes. For example, there was a feeling that getting close to the customer is absolutely critical. I entirely agree with that. In fact, I fear that without this there is little chance of reforming the banking culture at all. There also seems to have been a general desire in the Chamber to discuss again the issues raised and to see whether on Report there could be a way of advancing some of the arguments put forward today. In the mean time, I beg leave to withdraw the amendment.
Lord Phillips of Sudbury
My Lords, for the record, these amendments cover exactly 52 pages. The only other point I wish to make—I agree with the noble Lord, Lord Eatwell, here—is that, despite the payment system having its own regulator, new subsection (3) of government Amendment 60B states:
“The FCA must take such steps as are necessary to ensure that the Payment Systems Regulator is, at all times, capable of exercising”,
its functions. It has the job of overseeing the regulator, so why on earth does it not do the job itself?
Lord Sharkey
My Lords, I have two simple questions. One is to do with the innovation objective. Government Amendment 60M states:
“The innovation objective is to promote the development of, and innovation in, payment systems”.
It just occurred to me to ask whether there is any example of a regulator successfully promoting innovation. I would be interested to hear the Minister’s reply to that.
Lord Sharkey
Government Amendment 60U is headed, “Power to require disposal of interest in payment system”. New subsection (2) states:
“The power conferred … may be exercised only if the Payment Systems Regulator is satisfied that, if the power is not exercised, there is likely to be a restriction or distortion of competition in—
(a) the market for payment systems, or
(b) a market for services provided by payment systems”.
How is that a remedy for anything? When it comes to divestment or disposal, is it the Government’s notion that someone will pick up the shares that have been disposed of; and, if so, who will it be? What would be the incentive for anyone to pick them up?
Lord Newby
My Lords, I am grateful for the wide welcome given to these provisions.