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Consumer credit regulation changes and implications for members

CII Policy Briefing

On 1 April 2014, consumer credit regulation will move from the Office of Fair Trading (OFT) to the Financial Conduct Authority (FCA). This note summarises the changes, who might be affected by them, how the new regulation might look, and what members might consider doing in the meantime.

  • Some CII/PFS members may already be caught by the consumer credit regulation. If they give advice to the public, sole traders or small partnerships on anything to do with unsecured credit (applying for it, consolidating it, reducing it, or checking credit status); then they may need a consumer credit licence issued by the OFT. HM Treasury and FCA have started consulting on the transition.*
  • Regulation will be similar in some respects and tougher in others. There will be an interim permission regime starting in April 2014 and members who currently hold a consumer credit licence will need to apply for this well in advance, or risk carrying on activities unlicensed.
  • To encourage prompt take-up of this interim permission, the FCA have opened up an on-line application system, and are offering a 30% fee discounts to successful applications made prior to 30 Nov 2013.
  • The OFT offers a group licensing regime, but the FCA will be scrapping this. However professionals that are not authorised by the FCA for some other activity (eg financial advice) will be able to get an exemption.

Timings: following a high-level consultation that closed in May, the FCA will be publishing a consultation on more detailed rules this autumn. This will close in the winter, and final rules will be drafted around March 2014.

* Please note that this briefing is not meant to constitute definitive advice or guidance to individual members about their specific situation.

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