On 1st of April 2014, the Financial Conduct Authority (FCA) took over the regulation of the Consumer Credit Market for the Office of Fair Trade (OFT)
What does this mean for your business?
The consumer credit market is experiencing explosive growth. Recent research shows that this market has grown by 3.1% in 2014 to £164bn and is expected to grow at this rate for the next two years. Four out of five adults or 38.5 million adults in the UK have an unsecured loan, credit card or other consumer credit product according to Which.
Is this about to change with the introduction of the new regulations by the new regulator, the FCA? The FCA is intending to be a tough regulator with wide ranging enforcement powers, which they have not be scared to exercise. They have also introduced tougher regulations in the form of the Consumer Credit Handbook (CONC).
In their own estimates, the FCA thinks that around one third of this industry will disappear simply because some players just wont be able to comply, or compliance will put added strain on their business operationally and financially. For the stronger players, this is potentially good news as they have the opportunity to capture more market share.
Download our FREE Guide to Consumer Credit Compliance
Transition to new regulations
If you are an OFT license holder, then by now you would have received an interim permission from the FCA to continue your consumer credit related business. If not, then you are operating your business illegally.
By 1 April 2016, you will need to apply for full authorisation or variation of permission (if you are already regulated by the FCA or Prudential Regulatory Authority (PRA)). Authorisation is the gateway to the consumer credit market and the FCA is intending to make this a challenging gateway to ensure only the more robust firms get through. Firms will need to meet tough threshold conditions to successfully get authorised.
Failing authorisation could put you out of business or certainly restrict your business until you are authorised. Once authorised, firms will need to ensure they continue to comply on an ongoing basis.
Vedanvi’s Consumer Credit Change Services
We understand the additional pressure that authorisation and ongoing compliance will place on your business. We have therefore developed our services and tools to ensure you achieve authorisation first time. Once authorised, our services will help you get rid of ongoing headache of compliance.
We can support you in many ways through this process, including:
- Strategic review and advice, helping you take advantage of changes caused by the new regulations.
- Regulatory interpretation.
- Gap assessment and helping you put plans in place for authorisation application.
- Empowering for a successful authorisation or let us do it for you – we will guarantee a successful application first time round.
- Managing your authorisation programme.
- Supporting approved person’s through their application and interview process with the FCA.
- Training staff so that compliance is well embedded into your business.
- Helping you build capability for ongoing compliance.
Get in touch to learn about the bespoke way in which we can help you successfully comply with consumer credit n the most cost effective and commercially beneficial way.