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Online news: FCA to regulate consumer credit 27 January 2012
Consumer credit regulation will be iransferred from the Office of Fair Trading (OFT) to the Financial Conduct Authority (FCA) after the Financial Services Bill is enacted, the government has announced.
The Bill was introduced to Parliament yesterday, and is due for a second hearing on 6 February.
In a policy document released today by the Treasury, the government said it was “firmly committed” to securing passage for the Bill by the end of this year, with the changes implemented early in 2013.
The government has also said the change would be made “subject to further consultation and impact assessment”.
Crucially, the existing consumer rights contained within the Consumer Credit Act 2006 (CCA) will be retained by the FCA, with the government citing overwhelming support from consultations for a single regulator for all retail financial services, and a stronger, more flexible regime than currently possible under the CCA.
The Treasury’s policy document said: “The Financial Services Bill includes provisions enabling a full transfer of consumer credit regulation to the FCA, with retention of substantive CCA provisions.
“The government will exercise these powers if and when it has identified a model of FCA regulation that is proportionate for the different segments of the consumer credit market. The exercise of these powers will be subject to impact assessment and the approval of both Houses of Parliament.”
Under the new regime, the Financial Ombudsman Service will retain its role to deal with consumer detriment on a case-by-case basis, but consumer groups will be able to make super-complaints about serious consumer detriment to the FCA, in the same way they can to the OFT which are answered in 90 days.
Adam Phillips, chair of the Consumer Panel, said: “The Panel has long advocated this commonsense proposal which is what most people assume to be the situation now.
”When this happens, this will create a single regulator responsible for delivering effective consumer protection, whether consumers are saving or borrowing money.”
More to follow.
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