Hot topic: FCA regulation of consumer credit activities
On 1 April 2014, the FCA took over the regulation of consumer credit activities from the OFT. Since then the SRA has been trying to decide how best to…
On 1 April 2014, the FCA took over the regulation of consumer credit activities from the OFT. Since then the SRA has been trying to decide how best to alter the SRA Handbook to reflect the FCA's approach to regulation. However, several consultations and discussions later, the position is still far from clear.
We discussed this issue with Joanne Smith, solicitor and consultant within Compli, as part of our '60 seconds with...' feature for this week's Compli newsletter:
"Joanne, do you think that lawyers have got to grips with the transfer of consumer credit regulation to the FCA?
In a word “no” but how can we hope to understand the implications of the regime change if the SRA and FCA are still in a bun fight over which firms need to be regulated and how dual-regulation is going to work? I think the profession is sleepwalking into a nightmare.
Those firms with interim permission have yet to feel the weight of full dual-regulation (which will bite when they convert their interim permissions to full authorisation) and those who think that they don’t require it because of exclusions/exemptions will be left high and dry if the SRA follows through with its threat not to play ball and withdraws as a designated professional body (DPB). Without going into too much detail it is the SRA’s status as a DPB that allows most firms to continue dabbling in bits of consumer credit type work e.g. arranging title indemnity insurance, ATE polices, disbursement funding without having to give much thought to the FCA."
Watch this space for further developments!