3:02 pm, November 7, 2024
Close Brothers Motor Finance has resumed underwriting new business, following the controversial Court of Appeal ruling which sparked chaos at the end of last month.
The firm stopped offering new motor finance almost a fortnight ago on October 25, when judges sided with consumers in a highly contentious case against the lender.
The move sparked panic in the industry, with several other finance providers pulling out of the market, leaving customers and dealers alike unsure of how sales were going to be completed.
Now however, the firm says it has begun a ‘phased return to the writing of new UK motor finance business’
Bosses say that the outfit first resumed writing new business with selected partners on Saturday (Nov 2) and are now looking to switch on new business with all third party partners.
Confirming the news, Seán Kemple, CEO of Motor UK and Retail Finance Ireland, said, ‘The Hopcraft Court of Appeal judgment led to a unique situation that meant unprecedented change was needed, almost immediately.
‘We took the difficult decision to pause lending for the right reasons, to keep our customers, partners and our business safe.
‘I want to say a special thank you to my colleagues for reacting so quickly to the new requirements for commission disclosure, working night and day to develop an effective solution very quickly.
‘The judgment has meant process changes across the industry, and I’m also very grateful to our partners for their support, patience and for getting to grips with new ways of working so quickly.’
The Finance Commission Story So Far
- FCA needs to answer serious questions over car finance Court of Appeal decision
- Car finance slowly starting up again as lenders change systems and some freeze commission payments
- Chaos: Car finance grinds to a halt in wake of Court of Appeal decision
- Close Brothers stops underwriting new dealer finance after court ruling
- FCA chief executive calls for clarity over motor finance judgement
- Car finance pauses as banks figure out legal implications – who has stopped lending?
- Honda ‘pulls car finance and delays customer handovers’
- FLA: Court of Appeal ruling was ‘very unexpected’ but ‘welcome’
- Could car finance commissions case become the next PPI ‘scandal’?
- Short-term headache or genuine game-changer? What mounting finance crisis means for dealers
- Banks face downgraded credit ratings as a result of car finance scandal
Earlier this week, Car Dealer reported that Close Brothers had been put on ‘Rating Watch Negative’, meaning its credit rating could be downgraded as a result of the current situation.
The company also saw its share price plummet in the immediate aftermath of the ruling, before making a partial recovery later in the day.
As well as Close Brothers, the likes of Honda and and MotoNovo also paused new finance business.
