As outlined in Editions 4 and 7 of this Briefing, responsibility for the oversight of the UK consumer credit regulatory regime transfers from the Office of Fair Trading (OFT) to the Financial Conduct Authority (FCA) on 1 April 2014. The legislative provisions effecting this change have been brought into force via a series of secondary legislation, much of which amends the existing Consumer Credit Act 1974 (as amended). The 'made rules' for the regime have also now been set out, in FCA Policy Statement 14/3. Among the key elements of the new regime are new FCA rules on authorisation and permission, appointed representatives, supervision and regulatory reporting and conduct rules (which apply from 1 April 2014 subject to a six month transitional period during which mortgage firms may continue to comply with existing OFT guidance which effectively replicates the same provisions). New rules for so-called 'payday lenders' will take effect from 1 July 2014, with a further consultation proposing a cap on the cost of payday lending to be released later in 2014, and provisions applying to firms providing second charge loans will be subject to a separate regime when the EU Directive on Mortgage Credit takes effect in 2016 (see further below). Numerous consequential amendments have also been made to the Financial Services and Markets Act 2000 (FSMA), to designate consumer credit activities as "regulated activities", thus making it an offence to carry on those activities otherwise than in accordance with FSMA. Those entities holding existing UK consumer credit licences (including special purpose vehicles) will have already been contacted by the FCA to make them aware that those licences lapse on 31 March 2014, and that interim permission must be held by those wishing to carry on consumer credit business after that date. After 1 April 2014, the FCA will begin considering whether to grant previous licence-holders full authorisation, in a process that will be completed by 1 April 2016. All applicants for authorisation new to the industry from 1 April 2014 will have to apply to the FCA for full authorisation from that date.  Please read our Client Alertfor further details of the key changes. 

Useful links

FCA Consumer Credit Webpages

FCA Policy Statement 14/3: Detailed Rules for the FCA Consumer Credit Regime