The FCA has published a consultation paper on its proposed 2016/17 regulatory fees and levies for the FCA, Financial Ombudsman Service (FOS) and the Money Advice Service (MAS).
In relation to consumer credit, firms that moved from interim permission to full authorisation (to undertake consumer credit business) over the past two years have paid the FCA consumer credit minimum fees and variable fee rates, depending on their level of income from these activities. These fees were based on estimates made at the time of the assumptions that make up their calculation, some of which have changed significantly compared to current estimates. If the FCA continued to use the 2014 levels of fee rates in 2016/17, it would under recover the required annual funding requirement of £37.7 million by around £12 million.
As a result the FCA is proposing:
- not to change minimum fees for limited permission and full permission firms.
- not to change the variable fee for limited permission firms.
- to increase the 2014 set full permission variable fee of £0.78 to £1.30 (an increase of 68%), payable on each £1,000 of consumer credit income above the first £250,000.
Overall the FCA notes that 98% of consumer credit firms will be paying fees which have not changed since 2014.
The current levies for FOS and MAS remain unchanged.