Just over fourteen months ago, Consumers International (CI) launched an exciting new campaign that called on the G20 leaders meeting in Seoul to make recommendations on financial consumer protection. With the Cannes summit declaration just out, we thought now would be a good time to look at what we have achieved.
This is what the declaration has to say about financial consumer protection
“We agree that integration of financial consumer protection policies into regulatory and supervisory frameworks contributes to strengthening financial stability, endorse the FSB report on consumer finance protection and the high level principles on financial consumer protection prepared by the OECD together with the FSB. We will pursue the full application of these principles in our jurisdictions and ask the FSB and OECD along with other relevant bodies, to report on progress on their implementation to the upcoming Summits and develop further guidelines if appropriate.
In many ways this is a remarkably strong statement. The FSB report that the G20 has endorsed, calls for more work in three areas.
Firstly, the development of a new international organisation with a clear mandate and adequate resources to support financial consumer protection in banking and credit. This organisation will be built on the existing FinCoNet network of national regulatory authorities. FinCoNet will be meeting on Wednesday 9 November to discuss their new structure and mandate. CI will be there.
Secondly, the establishment of well-resourced and clearly accountable national institutions responsible for financial consumer protection.
And thirdly action to help regulators define risky and unfair financial products, tackle conflict of interest by requiring the disclosure of commission payments and consider the benefits of providing basic and low risk financial products.
Furthermore the G20 have endorsed and committed themselves to apply the OECD high level principles on financial consumer protection that – whilst they may not include everything we have called for – establish a good baseline that we can build on.
We also have a commitment that future summits will receive reports on progress in the implementation of this work – effectively giving consumer organisations a process by which we can gauge progress in this crucial area over the coming years.
Of course we haven’t achieved everything we were asking for but this is a strong package that addresses many of the key issues we have been campaigning on and gives us a lot to build on. We will lobby for the work proposed by the FSB and the development of strong guidelines that add the detail that is currently missing from the OECD principles.
There are many reasons for our success but to mention just two; financial services was the right issue at the right time – following the chaos and hardship caused by the financial crisis, governments were finally prepared to address what were often long standing consumer concerns about the safety and fairness of financial services.
But equally important was the fact that the campaign built on the expertise and experience of CI’s membership and received enthusiastic support from members around the world.
Over the last fourteen months CI members have written to governments in every G20 country and many non-G20 countries, we have had coverage and comment from many leading news agencies, we developed a set of recommendations that earned us considerable respect and were released before any other international body had even got started, we held member consultation sessions for the FSB and OECD in Hong Kong and Brussels, and we responded to every draft, and lobbied many of our national representatives.
Of course we haven’t achieved everything we wanted to and CI will continue to campaign for world leaders to build on these recommendations and work through the international processes to ensure governments act on their commitments.
But it is a real success for CI members around the world and one worth celebrating!