Treasury and the Department for Business Innovation and Skills have published a summary of the responses they received to their joint consultation on transfer of consumer credit regulation from OFT to the Financial Conduct Authority (FCA). Respondents broadly welcomed the plans, although many felt the implementation period would be too challenging and asked for further measures to smooth the transition. The Government, however, feels it could be detrimental to consumers to allow any longer transition or not to have key measures in force from "day one". It has, however, made a few changes from its original proposals, including:
- giving FCA power to designate as rules certain Consumer Credit Act (CCA) secondary legislation;
- the inclusion broking of vehicle leasing and Green Deal brokers within the limited permission regime;
- allowing lenders which do not apply interest and charges to be appointed representatives;
- excluding from the scope of regulation peer to peer activities where the lender is not an individual or a "relevant person" and the borrower is an individual acting for business purposes and borrowing over £25,000.
The Government has also clarified how firms with interim permissions are able to act as principals for appointed representatives. The Government has laid before Parliament, in draft, the two statutory instruments that will enable the transfer which are subject to the affirmative resolution procedure. One further instrument, subject to the negative resolution procedure, will be published soon and the Government hopes the legislative framework to effect the transfer will be in place before the summer. Its intention is to allow firms to register for interim permissions based on existing consumer credit licences from 2 September. FCA is to consult on its rulebook for consumer credit in the autumn. (Source: Government Responds on Consumer Credit Transfer and Draft RAO Amendment Order)