On 6 March, the FSA published a consultation paper on high-level proposals for a new FCA regime for consumer credit. On the same day, HM Treasury and BIS confirmed the Government's proposal to transfer the regulation of consumer credit from the OFT to the FCA in its own consultation paper.
The Government's key objectives for the transfer are to:
- increase protection for consumers
- have a proportionate regime that only places requirements on firms if there is a clear benefit for consumers.
The closing date for both consultation periods was 1 May 2013, and the FCA is due to feedback on responses by Summer/Autumn 2013, before starting a second consultation on the detailed rules for the new regime which will close in December 2013. The FCA is due to take over regulation of consumer credit on 1 April 2014.
The public responses to the two consultations seem broadly positive, such as the British Bankers' Associations reply and the response from the more consumer friendly Money Advisory Service, but the devil is likely to be in the detail of the rules published in the Autumn. The timetable is tight, and there's thought to be little chance of the transfer deadline slipping because 1 April 2014 is also the day the OFT will cease to exist (merging with the Competition Commission to form a new Competition and Markets Authority).
As the Building Societies Association put it in its reply to the HM Treasury and BIS consultation "the timetable for new final rules to be in place by April 2014 is optimistic, providing limited opportunity to think through the possible unintended consequences in what is a complicated area of law".