Transferring responsibilities for the Consumer Credit Act to the Financial Conduct Authority will present challenges for the mortgage industry, according to the Association of Mortgage Intermediaries.
The consumer credit market is currently overseen by the Office for Fair Trading but responsibility will pass to the FCA by 1 April 2014.
This transfer will present the mortgage industry with a series of challenges including the increased costs of regulation, says AMI chief executive Robert Sinclair.
He says: “The proposal to increase the cost of regulation from £10m to £25m adds another layer of expense to business that is already struggling like the rest of the economy. When combined with the higher hurdles that the FCA will impose on firms to reach full authorisation, we will undoubtedly have fewer firms paying these higher costs.”
The new conduct rules will not be available to the industry until late 2013. Since the implementation will be April 2014, Sinclair argues this does not present firms with enough time to react appropriately.
Mortgage brokers will still be required to hold consumer credit permission under the new conduct rules. A large number of brokers hold this permission to cover reviewing or advising on settling unsecured credit, leading Sinclair to describe the regulator’s decision not to roll it into the FSA’s mortgages and home finance: conduct of business sourcebook as an “opportunity missed.”