Transcript COMPLIANCE DAY - Consumer credit application

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Susan de Mont is acting director of credit authorisations at the FCA
8 Spetember 2014 Money Marketing
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The FCA’s process is tougher than OFT licensing
and should help establish a minimum standard
within the industry
The biggest change to the regulatory landscape
this year has been the FCA’s assumption of
responsibility – transferred from the Office of Fair
Trading – for about 50,000 consumer credit
firms, many of which have never been regulated
by the FCA.
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Some may have assumed the consumer credit
regulations apply only to firms carrying out
payday lending and debt management activities
but the scope is much wider.
Mortgage brokers, IFAs and insurance brokers are
also covered because they may carry out activities
such as credit brokering or debt adjusting.
Anyone wishing to perform these activities after 1
April had to apply for interim permission by the
end of March.
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Critical step
If you were part of that process, we are coming to
the next critical step where firms must prepare
for full authorisation.
The authorisations gateway is one of the key
differences between the FCA and OFT regime and
will help to improve standards in the sector.
Firms and individuals will need to prove that their
business models are fair and robust, and
demonstrate how they will put the interests of
consumers first.
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This process is deliberately more detailed than
OFT licensing used to be and will result in some
firms failing to secure authorisation.
But we believe it will help establish a minimum
standard across the industry, which is in
everyone’s best interest.
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Given the large number of firms involved, each
activity has been given its own application period.
The authorisations process will start in October
and run until March 2016. If you have interim
permission, we have recently written to let you
know your application period. You can also check
the FCA website
http://www.fca.org.uk/static/fca/articletype/application-periods-direction-to-firms.pdf.
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As with all regulation, there are some
exemptions, so we are asking firms to check
whether they need authorisation before applying
– even if they already hold interim permission.
For example, certain aspects of home finance
transactions are exempt when carried out by an
administrator and some of the deposit-taking
rules do not apply to local authorities.
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If you are already authorised by the FCA for
another regulated activity, rather than going
through the full process again you may be able to
apply for a variation of permission to add
consumer credit activities to your existing
authorisation.
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If you are a principal for appointed
representatives, you can continue this
arrangement for consumer credit.
However, you must apply for a variation of
permission that covers the consumer credit
activities that your ARs will be responsible for.
We introduced an early application period for
principals from June to August.
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If you missed this, you can still apply for your
application period to be moved forward.
We recognise that the application process will feel
different to firms unfamiliar with FCA regulation
and we want to make this as straightforward as
possible.
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If you are still unsure which elements apply to
you, the FCA has an online decision tool and
step-by-step guide to authorisations which can
help you navigate the process.
We believe the new authorisation system can help
build a consumer credit market that people can
trust and that will work well for firms.


The FCA’s process is tougher than OFT licensing
and should help establish a minimum standard
within the industry
The biggest change to the regulatory landscape
this year has been the FCA’s assumption of
responsibility – transferred from the Office of Fair
Trading – for about 50,000 consumer credit
firms, many of which have never been regulated
by the FCA.
OFT Regulation
FCA Interim Permission
FCA Application
FCA Authorisation