At last this feels like the final chapter. PPI has been a running sore in the side of both the industry and the regulator since at least 2006. That’s the last seven years of the FSA’s existence plus the first six years of the FCA’s. in that period, the regulator has had four CEOs, and I suspect the major banks have seen a similar turnover. 

Given its scale and significance, it’s worth starting to try and assess its overall meaning now, before it ends and the wisdom of hindsight becomes overwhelming.

Here are a few reflections to start with:

1. I’ve written before that, while the facts are essentially undisputed, their meaning has always been contentious, witness submissions to the PCBS in 2012. A side-effect of this is that dialogue between the top of the regulator and the top of the relevant banks was for a long time much less productive than normal. Even now, I suspect everyone involved feels somehow misunderstood and hard done by. Effective regulation often rests on a common understanding of the issue. With PPI this was largely missing.

2. The FSA may, for a long time, have underestimated the scale of PPI, but the frequent assumption that it wasn’t prioritised isn’t accurate. It was, and by many areas of the regulator – by both Firm and Thematic Supervision, the TCF (Treating Customers Fairly) programme, Enforcement and Policy – as well as by ExCo and the Board. Among the problems that emerged, however, were the difficulty in formulating a coordinated strategy, and an optimism bias towards believing so much activity must be effective.

3. Another regulatory trait that emerged over the history of PPI was the desire to simplify. This is not, of course, just a regulatory characteristic – the sense that complexity is a diversion - “e.g. keep it simple, stupid” - and that acting quickly is often a virtue, are now common features of management theory. But in the case of PPI, being quick and decisive hasn’t worked for either regulators or firms. Layer after layer of unavoidable complexity has become exposed, right through to this final guidance on interpreting the Plevin judgement.

4. Like mortgage endowment mis-selling before it, PPI showed that the complaints mechanism is an ineffective tool for mass remediation. Pushing customers through firms' complaints procedures, sometimes followed by the FOS, has evidently been frustrating for many and a deterrent for many others. Given this, it isn’t a great surprise that, when Claims Management Companies (CMCs) came on the scene, so many consumers chose to sacrifice 20%+ of any pay out to have the effort of complaining taken off their hands. It would be worth the FCA starting now to work with the industry and FOS, to design a better, faster way of identifying and paying those who deserve redress.

Lastly, if not already in train, it would make sense to do a proper assessment of the FCA’s “Arnie” adverts, designed to reach consumers who might deserve redress but haven’t yet complained. It’s a different, wholly unusual approach. But, assuming it’s been successful, it might represent an important strand of the way forward.