View more on these topics

FCA to target payday lenders through consumer credit regime

The Financial Conduct Authority plans to focus on high risks posed by firms such as payday lenders when it assumes responsibility for regulating the consumer credit industry.

UK-Currency-British-Pounds-Notes-480.jpg

The consumer credit market is currently overseen by the Office for Fair Trading but responsibility will pass to the new regulator the FCA by 1 April 2014.

The FSA has published a consultation today setting out the FCA’s approach to consumer credit regulation.

It set out that the new regime will focus on higher risk firms, such as payday lenders, pawnbrokers, credit reference agencies and debt collection.

Lower risk firms will be subject to less onerous standards and will pay lower fees. These firms include not-for-profit debt counselling, businesses that provide lending as a side activity, and credit broking, such as where retailers and motor dealers introduce customers to lenders.

The transfer of consumer credit regulation from the OFT to the FCA will be phased in over two years. An interim period will begin in April 2014 with full implementation by April 2016.

From autumn 2013, existing OFT licence holders can apply for interim permission so they can continue to operate. They will have to provide limited information and pay a one-off fee.

Existing OFT licences will lapse on 31 March 2014 and FCA interim permissions will begin from 1 April  2014. Firms will need to be fully authorised by April 2016.

FCA chief executive designate Martin Wheatley says: “We will focus our efforts on the areas of highest risk, and ensure we use our resources sensibly and proportionately.

“The work we have done with consumer groups and trade bodies has helped us reach this point and will continue to help us make the transition as smooth as possible.”

Advisers need to hold a consumer credit licence if they spread their adviser charge over more than four instalments. Many advisers are also likely to hold a consumer credit licence if they advise on mortgages or provide debt advice

Recommended

3

Nationwide U-turn over landlords with tenants on housing benefit

The Mortgage Works, Nationwide’s buy-to-let lending subsidiary, U-turned on its decision to stop lending to landlords who have tenants on housing benefits late on Friday afternoon last week. On Wednesday last week, Mortgage Strategy revealed TMW had altered its criteria and had stopped new lending to landlords who have tenants receiving housing benefits, except in […]

Guide

Guide: reporting to the Pensions Regulator — what and when?

Johnson Fleming has published a step-by-step guide demonstrating the importance of record keeping and reporting, and how it can ensure you operate a successful scheme. The guide takes you through some key questions you need to ask and identifies the information you need to obtain. The topics include: why you need to keep records and the benefits of doing this; registering your scheme; what information you need to record to ensure you meet the Pensions Regulator’s requirements; and what items need to be recorded and when.

Newsletter

News and expert analysis straight to your inbox

Sign up