This week saw the making of regulations to allow newly authorised consumer credit firms to continue using their Interim Permission number for a transitional period.
EU Benchmark Regulation Adopted
The EU Parliament meeting in plenary session has adopted the proposed Benchmark Regulation. The legislation aims to create a common framework and a consistent approach to financial benchmarks. It will regulate all aspects of benchmarks used in consumer credit and mortgage contracts amending both the Consumer Credit Directive and Mortgage Credit Directive with regard to contracts that reference a benchmark rate of interest.
EU Parliament, 29 April 2016
Consumer Credit (Disclosure of Information) (Amendment) Regulations 2016
The Consumer Credit (Disclosure of Information) (Amendment) Regulations 2016 (SI 2016/530) have been published, together with an explanatory memorandum. They amend tables 5 of Schedules 1 and 3 to the Consumer Credit (Disclosure of Information) Regulations 2010 to ensure that a firm which has been given a Firm Reference Number following authorisation by the Financial Conduct Authority may continue to use its “Interim Permission Number” on forms for a period of 90 days, if it wishes to do so. The regulations come into force on 17 May 2016.
Legislation.gov.uk, 25 April 2016
FSCS announces final levy for 2016/17
The Financial Services Compensation Scheme (FSCS) has announced that its final levy for 2016/17 is £337 million.
FSCS, 26 April 2016
Credit Unions and Co-operative and Community Benefit Societies Act (Northern Ireland) 2016
The Credit Unions and Co-operative and Community Benefit Societies Act (Northern Ireland) 2016 (2016 Act) has been published on legislation.gov.uk, together with explanatory notes. The 2016 Act received Royal Assent on 22 April 2016. It amends the Credit Unions (Northern Ireland) Order 1985 and the Industrial and Provident Societies Act (Northern Ireland) 1969, which govern the operations of Northern Ireland credit unions and industrial and provident societies respectively.
Legislation.gov.uk, 28 April 2016
Roadmap for Evaluation of Consumer Rights Directive
The European Commission announced on 25 April 2016 a roadmap to review the Consumer Rights Directive (CRD) as required by the legislation itself, which will feed into its work on assessing the fitness of six other EU consumer law directives (e.g. the Unfair Contract Terms Directive). The CRD is particularly relevant to the EU's Digital Market Strategy and the possible further harmonisation of consumer rules on e-commerce and digital content. The report on the CRD is due for adoption during Q1 2017 following a 12 week online consultation. There will also be a targeted consultation of regulators, businesses and trade/consumer bodies with preliminary results presented at a Consumer Summit in 2016.
European Commission, 25 April 2016
ECON votes in favour of virtual currency taskforce
The European Parliament's Committee on Economic and Monetary Affairs (ECON) has announced that it has voted to adopt a draft report on virtual currencies, which would see the creation of a taskforce which would regulate virtual currencies, to prevent their use for money laundering and terrorist financing.
ECON, 24 April 2016
Suspension of FCA refusal to grant authorisation
The Financial Conduct Authority has refused an application to vary an existing Part 4A permission for insurance mediation to include credit brokering, debt adjusting, debt-counselling and debt administration carried on under an Interim Permission. This was on the grounds that the applicant had provided too little information over what activities and business would be undertaken. In the meantime, the Upper Tribunal had to consider if the applicant should be allowed to continue those activities until the hearing of its substantive challenge to the FCA's decision. In applying the appropriate test under its rules, the Tribunal concluded it could not be satisfied that to do so would not prejudice the interests of consumers and declined to suspend the effect of the FCA's decision notice.
Koksal (a/ Arcis Management Consultancy) v FCA  UKUT 192 (TCC), 22 April 2016
EU court court considers definition of "total amount of credit" and "amount of drawdown"
As part of a preliminary reference and among other questions referred by the national court, the EU Court of Justice was asked to interpret the concepts of "total amount of credit" and "amount of drawdown" under Articles 3(1) and 10(2) of the Consumer Credit Directive. It confirmed that no administrative costs, interest, commissions or any other costs required to be paid by a consumer may be included in the total amount of the credit as this would undervalue the annual percentage rate of interest.
Radlinger v Finway a.s – (Case C-377/14), 21 April 2016