On 23 February 2016, the Bank of England and Financial Services Bill 2015-2016 completed its Committee Stage in the House of Commons.
One of the main changes made to the version presented at the first reading is the introduction of a new clause – Clause 28 in relation to illegal money lending. This clause introduces a new Part 20B into the Financial Services and Markets Act 2000 (FSMA). The clause gives the FCA the power to collect a levy from consumer credit firms to fund the Illegal Money Lending Team.
Harriet Baldwin, the Economic Secretary to the Treasury, argues that the cost to consumer credit firms would be “small”, totalling around £4.7million per annum, and that this move would put the system on a sustainable footing. It is envisaged that the FCA will consult on how the levy will be collected in its annual fees consultation in the Autumn.
In response to this, Rob Marris, the Shadow Financial Secretary declared that Labour welcomed stability of funding, but believed that the costs ought to come from general taxation, because by imposing a levy on the consumer credit firms “the good guys – people who get money from non-loan sharks [would be] subsidising the bad guys, the illegal money lending operators.” He further stated that putting the burden on users of consumer credit firms, was a form of hypothecated taxation.
The report stage of this bill has not yet been scheduled.