HM Treasury's role in financial services law

HM Treasury is the government department that writes the laws behind almost every financial product you use. Parliament passes Acts such as the Financial Services and Markets Act 2000 (FSMA), and the Treasury then makes the regulations and orders under those Acts that decide which activities are regulated, who can do them, and what protections you get. The regulators you hear about more often, the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA), work inside the framework the Treasury builds¹.

The Treasury's reach into everyday money is wide but indirect. It holds overall policy responsibility for personal debt², it designates the nine largest personal current account providers in the UK as having to offer basic bank accounts³, and it makes the regulations behind schemes such as statutory debt repayment plans, which were made under the Financial Guidance and Claims Act 2018⁴. It also shapes the machinery of redress: following a review of the Financial Ombudsman Service, the government has said it will legislate to make the FOS Chair a government appointment made by HM Treasury, and the appointment of the Chief Ombudsman subject to Treasury approval⁵.

What HM Treasury does in financial services law

HM Treasury is a ministerial department, led by the Chancellor of the Exchequer. In financial services its job is to hold the pen on legislation: it drafts and lays before Parliament the regulations, orders and amendments that define the perimeter of regulation. A National Audit Office report on problem debt records that HM Treasury has overall policy responsibility for personal debt², which is why changes to debt advice, breathing space schemes and statutory debt repayment plans come from the Treasury rather than from the FCA.

Its approach to legislation has been set out in published documents. The Treasury published a document on 27 June 2018 setting out in more detail its approach to financial services legislation under the European Union (Withdrawal) Act¹⁰, the mechanism by which EU-derived financial rules were carried into UK law. That work continues: the Treasury makes regulations in exercise of powers such as sections 3(1) and 84(2) of the Financial Services and Markets Act 2023¹¹, and it may make contingency fund regulations permitting the FSCS scheme manager to impose levies to maintain contingency funds¹².

The Treasury also uses its powers to create practical schemes. The statutory debt repayment plan, a formal insolvency solution for problem debt, was made by the Treasury under section 7 of the Financial Guidance and Claims Act 2018⁴. On the horizon, HM Treasury has been taking forward legislation via the Financial Services and Markets Bill to ensure the legislative foundations are in place to regulate stablecoins and cryptoasset activities in the UK¹³. And it publishes data that shapes policy: it has committed to publishing basic bank account figures annually, while noting that the figures reported by providers have not been verified by HM Treasury or any other body³.

The Treasury sets the framework; the FCA and PRA write and enforce the rules

The division of labour matters to consumers because it decides who to contact. The Treasury writes the law; the regulators write the rules under it and enforce them against firms. The Financial Services Compensation Scheme follows rules set by the FCA and the PRA, with the PRA responsible for deposits and insurance rules and the FCA responsible for rules relating to other activities such as pension advice and investments¹. The FSCS itself states that it follows rules set by those two regulators¹⁴.

The Financial Ombudsman Service likewise follows rules set by the FCA when it decides complaints¹⁵. The FCA regulates financial services firms and financial markets in the UK¹⁶, and while the PRA's job is to make sure firms are stable and resilient, the FCA works with them to make sure they treat customers fairly¹⁷. When you check whether your money is protected, the FSCS guidance asks you to find out whether the particular activity the authorised firm is carrying out for you is regulated by the PRA or the FCA¹⁸.

Some arrangements cut across several bodies. The Joint Regulatory Oversight Committee, which oversees the development of account-to-account payments, brings together HM Treasury, the Payment Systems Regulator, the FCA and the Competition and Markets Authority²⁰. Our guide to who regulates what sets out the full map, and complaining about the FCA, PRA or Bank of England covers the separate route for complaints about regulators themselves.

Buy now pay later: bringing interest-free credit under FCA regulation

For years, interest-free buy now pay later agreements sat outside regulation. An exemption in law meant these payment plans were not treated in the same way as traditional credit agreements, so the FCA did not regulate them²¹. That changed through Treasury legislation: the Financial Services and Markets Act 2000 (Regulated Activities etc.) (Amendment) Order 2025 provides for certain buy now pay later agreements, currently exempt agreements within article 60F(2) of the Regulated Activities Order 2001, to become regulated credit agreements within the meaning of article 60B(3)²². The instrument brings interest-free BNPL agreements into regulation under the Financial Services and Markets Act framework²⁴.

Rules regulating the sector came into force in July 2026⁶. The Treasury also has a specific power in this area: section 37 of the Financial Services Act 2021 empowers the Treasury to exclude certain Consumer Credit Act provisions for BNPL agreements brought under consumer credit regulation²⁵. In parallel, the FCA has acted on a sharp practice in the market: it banned interest charges on credit that customers had already paid off during interest-free loan periods²⁶.

Not everything around BNPL is regulated, and the FCA publishes a list of products it does not regulate or supervise, which includes unregulated buy now pay later alongside advice on wills and probate, buy-to-let mortgages and debt collection of unpaid council tax and utility bills²⁷. For what the new regime means in practice, see deferred payment credit: the new buy now pay later rules, and for how protections compare with a credit card, buy now pay later or credit card: purchase protection compared.

Replacing the Consumer Credit Act

The Consumer Credit Act 1974 is the statute behind credit cards, personal loans, hire purchase and the information lenders must give you. It has been amended repeatedly: the Consumer Credit Act 2006 amended the 1974 Act and extended the ombudsman scheme under FSMA to cover Consumer Credit Act licensees²⁸, and later instruments, such as the Consumer Credit (Amendment) (EU Exit) Regulations 2018, substituted references to the United Kingdom in its schedules²⁹. Even the advertising regulations under the Act have a history of Treasury-level amendment, signed by a minister at the Department of Trade and Industry in 2000³⁰.

The big change is now repeal. In May 2026 the government announced it would repeal much of the law governing consumer credit⁶. The Act as it stands is up to date with all changes known to be in force on or before 28 September 2026, but there are changes that may be brought into force at a future date³¹. Until Parliament actually repeals it, the Act still governs your credit agreements.

Two views from inside the system are worth knowing. The Financial Ombudsman Service, responding to a Treasury consultation on reforming the Act, said the FCA's Consumer Duty will complement, but is no substitute for, the requirements of the CCA³². Meanwhile the FCA has been moving protections into its own rulebook: its policy statement PS24/2 strengthened protections for borrowers in financial difficulty by incorporating relevant aspects of its guidance for consumer credit, mortgages and overdrafts into the FCA Handbook²⁸. What this means for you as a borrower is set out in reforming the Consumer Credit Act.

Ombudsman complaints: today's time limits and proposed changes

The Financial Ombudsman Service is free to consumers and decides disputes between firms and their customers. Its caseload is large and growing: it received 305,726 new complaints in 2024/25, the highest level for six years³³. It has also recently introduced charges for professional representatives who bring more than ten complaints a year³³. Its history shows how consumer credit drives its workload: as far back as 2009 it was forecasting that consumer-credit complaints referred to it could rise to 10,000 in 2010/11, having received over 3,000 in the first six months of 2009/10 alone³⁴.

Time limits already apply. You normally have six years of when the event happened, or three years from when you first realised, or could have realised, that you had a reason to complain⁷. The amount the Ombudsman can award depends on when the complaint was referred and when the firm's act or omission occurred: for complaints referred on or after 1 April 2025 about acts or omissions before 1 April 2019 the limit is £200,000, while earlier referral periods carried lower limits, such as £160,000 for complaints referred between 1 April 2019 and 31 March 2022 about acts before 1 April 2019³⁵.

The Treasury has been reviewing the Ombudsman itself. Following its review of the Financial Ombudsman Service, the government has said it will legislate to make the FOS Chair a government appointment made by HM Treasury, and the appointment of the Chief Ombudsman subject to Treasury approval⁵. A Financial Services and Markets Bill introduced in the House of Lords on 19 May 2026 takes forward some of the government's published reforms to the redress system. For the routes available to you now, see FSCS or Financial Ombudsman: who to go to and Financial Ombudsman or court: which route for a complaint.

Access to cash: one mile in towns, three miles in the countryside

Cash access has become a Treasury policy area with a measurable aim. The Treasury's Policy Statement set out the government's aim for the vast majority of people in the UK to have reasonable access to cash deposit and withdrawal services within a maximum of either one mile in urban areas or three miles in rural areas⁸. The Financial Services and Markets Act 2023 granted the FCA responsibility and powers over cash access, so the regulator now operates the regime the Treasury designed³⁶.

Under the FCA's access to cash regime, when a firm identifies a trigger it must assess the area's cash needs. The FCA's policy statement lists services that are expected to close, cash services for personal current accounts that are not free, cashback with a purchase, and additional services that may result from any other assessment undertaken as a result of the same trigger, among the matters firms must consider²⁷. In practice this is what has driven the spread of shared banking hubs on high streets where bank branches have closed.

The Treasury keeps the policy under review rather than reporting annually: it does not consider there is a need for annual reporting but remains committed to evaluating relevant data³⁶. If your area has lost its last cash point or branch, how to request a cash access assessment explains the process, and the access to cash rules covers branch closure assessments in full.

Financial inclusion and personal debt policy

Financial inclusion, meaning access to banking, credit and advice for people the market leaves out, is a Treasury policy field. The Chancellor has committed to publishing a Financial Inclusion Strategy, alongside a supporting committee³⁶. The Treasury Committee has since scrutinised that strategy, and its report finds the government does not have a complete plan to tackle financial exclusion, calling for milestones and clarity on whether the Treasury would intervene if voluntary pilots fail.

The Treasury's tools here are concrete. It designated the nine largest personal current account providers in the UK to offer basic bank accounts, and where an applicant is refused, the institution must tell the customer how to complain to the institution and the Financial Ombudsman Service and provide the relevant contact details³. On debt, the National Audit Office's work on tackling problem debt records the Treasury's overall policy responsibility², and the statutory debt repayment plan, made by the Treasury under the Financial Guidance and Claims Act 2018, gives people in serious debt a formal route to a managed repayment plan⁴.

The FCA also contributes protections from within its own rulebook: PS24/2 strengthened protections for borrowers in financial difficulty²⁸. For the wider picture, see financial inclusion: policy on access to banking, credit and advice and debt: a complete guide to help, solutions and your rights.

Cryptoassets: where the rules are heading

Cryptoassets illustrate how the Treasury builds a regulatory perimeter. The government's proposed legislative approach is to bring cryptoassets within the framework established by the Financial Services and Markets Act 2000 by expanding the list of specified investments in Part III of the Regulated Activities Order³⁷. On 1 February 2023 HM Treasury published a comprehensive consultation with wide-ranging proposals, including a draft framework for issuance disclosures, market abuse and core cryptoasset activities such as operating a cryptoasset trading platform and custodying cryptoassets¹³. The Treasury is also proposing a new authorisation regime under the FSMA framework for persons carrying out certain activities involving cryptoassets¹³. A cryptoasset financial promotions regime came into force in late 2023¹³.

There has been genuine disagreement about the direction. The Treasury Committee strongly recommended that the government regulate retail trading and investment activity in unbacked cryptoassets as gambling rather than as a financial service³⁷, and expressed concern that regulating it as a financial service would create a 'halo' effect leading consumers to believe the activity is safer than it is, or protected when it is not³⁸. HM Treasury firmly disagrees with that recommendation¹³.

For a consumer, the practical point is that regulation of a market is not protection of an investment. The Committee's concern about the halo effect is exactly the risk: a regulated crypto exchange does not make the asset itself safe. See regulated or unregulated investments: what protection you get for where the line falls.

Consultations: how the Treasury changes the rules and how to respond

Every significant Treasury change goes through consultation. The Payment Services (Amendment) Regulations 2024 record that the Treasury consulted the regulators as required by section 3(6) of the Act before making them¹¹, and in July 2026 the government opened a consultation on modernising payment services regulation, seeking views on how it should adapt to innovations in tokenised payments, Open Banking and agentic payments. Consultations are published on GOV.UK and are open to anyone, including individual consumers, not just firms and trade bodies.

Bodies outside government feed directly into the outcome. The Financial Ombudsman Service's response to the Treasury's consultation on reforming the Consumer Credit Act³² is one example: its view that the FCA's Consumer Duty is no substitute for the Act's requirements fed into the debate over what should move into FCA rules and what should stay in statute.

If you want to follow or respond to open consultations, consultations and discussion papers: how new rules are made and how to respond explains the process step by step, including what happens to responses and how final policy statements emerge.

Messages claiming to be from the government

One thing HM Treasury and its fellow departments never do is ask for your financial details by text. HMRC states plainly:

It also advises you not to open any links or reply to a text message claiming to be from HMRC that offers you a tax refund in exchange for personal or financial details⁹. Genuine HMRC texts, such as those about fast parcel operator drivers, will not ask for personal or financial information or link directly to any websites⁹. Scammers exploit the credibility of government names, so treat any unexpected message asking for details, payment or account access as fraudulent. Our guide to scams and fraud covers how to report them.