News release

Consumer credit regulation passes final hurdle

Our new model for consumer credit regulation has passed its final hurdle.

The new approach should mean the majority of firms will not have to be regulated by both the Financial Conduct Authority (FCA) and ourselves, reducing the burden on firms while ensuring client protections. The new approach, which was approved by the Legal Services Board (LSB) on 4 December allows us to carry out consumer credit regulation for firms if their work is an integral part of the legal services being provided.

We have worked with the FCA for the last year to produce the best way to regulate consumer credit activities, aiming to keep to a minimum the level of regulation and number of regulators firms have to deal with. Some firms will still need to be regulated by the FCA so firms are reminded to assess whether or not they need to apply for dual regulation before the changes come into effect on 1 April 2016.

Crispin Passmore, Executive Director for Policy, said: "Thank you to the many individuals and firms whose expert input has helped us develop the best possible model. We have worked closely with the FCA to produce proposals that offer a balanced and proportionate approach to regulation. These proposals are good news for firms and their clients alike and are part of our ongoing work to simplify and streamline our regulatory approach. LSB approval means that we can move on quickly.

"What we now need is for all firms that carry out any kind of consumer credit work to consider their business model to see if the services they provide are covered by our regulatory arrangements. If not, they will need to apply to the FCA for regulation before transitional arrangements end in the spring."

We are also developing a toolkit that will help firms get to grips with the regulatory requirements for providing consumer credit services. This will be available online in the near future.

We consulted on proposals for consumer credit regulation between 26 June and 7 August 2015. The consultation can be viewed here:

Go to the consultation

The LSB decision can be found here:

Go to the LSB decision

 
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