On 1 April 2014 the Office of Fair Trading (OFT) will be replaced by The Financial Conduct Authority (FCA) as the new regulator for Consumer Credit.
Firms that offer credit to consumers are currently licensed by the Office of Fair Trading; however in March the government and the OFT published proposals to transfer responsibility for regulation in this area to the newly formed Financial Conduct Authority. What this means is that any business that provides loans, overdrafts including debt collection, credit intermediaries and debt advisers need to take note. The changes will establish a ‘conduct of business regime’ which will regulate all the key areas of retail financial services, including consumer credit.
How will this affect your business?
OFT licences will expire on 31 March 2014, by which date all licensed firms will need to notify the FCA that they want ‘interim permission’ and pay a fee. On 1 April 2014 firms with consumer credit licences with the OFT will transfer to the FCA. The ‘interim permissions’ will be valid from 1 April 2016. By that date, firms will need to have applied for and obtained full FCA authorisation.
* Businesses that currently hold a CCL will be required to apply for Interim Permission between September 2013 and March 2014
* There are two levels of authorisation: the levels of which are still under discussion
* High Risk
* Low Risk
* The cost of a self-employed license is £150, it is £350 for all other firms
* The FCA will issue further information that will clarify the application process. We will keep you up to date with any new pieces of information
OFT Licences will expire on 31 March 2014
SEPT 2013 – APR 2014
APPLY FOR INTERIM PERMISSION
1ST APRIL 2014
NEW REGIME COMMENCES