The Association of Mortgage Intermediaries has welcomed the Government’s decision to launch a programme of rebates for advisers who are hit by new interim consumer credit licence charges.
A paper released by the Financial Conduct Authority last week also confirmed a 30 per cent discount for all sole traders and firms who apply for an interim licence before 30 November.
Mortgage Strategy’s sister title Money Marketing revealed in July the FCA had written to firms with a consumer credit licence requiring them to pay up to £350 for interim permissions as part of the new FCA-regulated consumer credit market.
The news angered advisers, many of whom had already paid for “indefinite” licences.
The 30 per cent discount will see firms pay £245 for interim permissions while sole traders would pay £105 instead of £150 with the discount.
Proposed interim charges relate to the period when regulation for consumer credit regulation is handed from the Office of Fair Trading to the FCA between April 2014 and April 2016.
AMI chief executive Robert Sinclair says: “We are grateful that the government recognised the issues raised and will offer rebates to those firms that have already incurred the substantial cost of obtaining a new consumer credit license since 2008. These broker firms should not be unfairly disadvantaged because of unforeseen changes to the regulatory architecture.”
“We would encourage firms not to delay in checking that their license details are correct and registering with the FCA to take advantage of the 30 per cent discount.”
Details of the rebate system will be released in the regulator’s consultation paper due to be published in October.
Since 2008 most applications for consumer credit licences have been granted on an indefinite basis with firms expected to make a one-off payment to be granted a CCL, alongside five-yearly maintenance charges.
The cost for these licences was increased to £670 from £575 for sole traders from 1 April this year and to £1,466 from £1,215 for partnerships or companies. This is accompanied by a maintenance charge every five years, costing £208 for sole traders or £505 for partnerships or companies.
Most of those who advise on mortgages or provide debt advice will hold a consumer credit licence.