consumer credit authorisation. community housing cymru cartrefi cymunedol consumer credit...

Consumer Credit Authorisation

Community Housing Cymru Cartrefi Cymunedol


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https://www.youtube.com/watch?v=Cz2-ukrd2VQ








Consumer Credit – the new regime

The Consunmer Credit License CCL

Regulation by the Office of Fair Trading (OFT)

Consumer Credit Act 1974 and subordinate legislation

Limited number of exceptions

Regulated agreements/activities

Advertising regulations

Generally considered “lower level” regulation than FCA

Involvement of RSLs


• Two initial consultations: HM Treasury and Financial Services Authority (FSA)

• FSA now the Financial Conduct Authority (FCA)

• Transfer of regulation from OFT to FCA on 1 April 2014

• Replicating a lot of the previous regime in terms of substance with some exemptions

• FCA Handbook

Changing landscape


Consumer Credit – the new regimeFCA

• Rigorous application process

• Change in terminology: no longer apply for licence but for authorisation to carry on regulated activities

• Different regulation requirements: two-tiered system with higher and lower levels

• Application for authorisation with either “limited” or “full” permission



Where are we now?

• Starting in April 2014, we are now in a two year transitional period – the interim period

• During this time organisations carrying out “regulated activities” need to apply for authorisation

• Former holders of a consumer credit licence under the OFT regime should now have an interim permission covering those activities

• Interim permission lasts until FCA authorisation

• Holders of interim permission contacted by FCA and given three month window for applications



Where are we now?

• Ensure activities are within scope of interim permission

• Carrying out regulated activity without and interim permission

• Consequences of non-compliance:– Criminal activity– Potential unenforceability of

agreements



Regulated activities - what should I consider?

Most regulated activities of RSLs generally require limited rather than full permission

Examine activities carefully:– RSLs becoming more diverse – carrying

out activities that might need authorisation

– Some activities are not immediately obvious as regulated consumer credit activities


Consumer Credit – the new regimeRegulated activities - what should I consider?

Most relevant to RSLs– Credit– Consumer hire – Credit broking– Not-for-profit debt counselling– Not-for-profit debt adjusting– Debt administration– Debt collecting



• Do you discuss with tenants or service users the payment of priority debts over non priority debts, for example paying council tax or rent before the Provy?

• Do you discuss lowering some areas of expenditure so that the tenant or service user can afford to pay their rent? e.g lowering money spent on smoking to pay their rent

• Do you help tenants/ service users to contact creditors to make arrangements to repay debts?

• Do you suggest or recommend debt solutions to tenants or service users to help them with their debts?

• Do you advice against certain debt solutions for example. Advice against fee charging debt management companies?



• Do you accept deposits from tenants or service users• Do you arrange mortgage contracts• Do you give debt advice to tenants or service users. For

example advice regarding council tax debt, utility debts, water debts (including Customer assistance fund), pay day lenders and debts covered by the consumer credit act.

• Do you recommend financial products to tenants or service users, including home insurance, credit unions and bank accounts.

• Do you carry out credit searches for any reason on any individual, including staff members

• Do you offer loans at a rate of more than 1% plus bank base rate?



The FCA took over regulation of consumer credit from the Office of Fair Trading (OFT) in April, requiring landlords to seek new registration or apply for interim permission.

The recent article in inside Housing - http://bit.ly/1DEd3wg

In Wales: 3 HAs are Authorised.22 Interim Permissions (just debt 8

counselling)7 Missed Interim Permission12 with no data

http://bit.ly/1DEd3wg




Activities article numbers, previously categories:60B(1) Acting as lender where an exemption does not

apply. Examples include most unsecured lending and employee loans with a high interest rate.

Examples are:Homebuy leasesService charge loans Employee car loans

Not the right to buy discount

.



Activities article numbers, previously categories:60N(1) Consumer hire business – leasing, hiring or renting

goods to individuals. This category does not apply to tenancies of furnished properties or to hire purchase arrangements.

Examples are:Hiring out furniture separately from a tenancy agreementHiring out alarm equipment for the elderlyHiring out IT equipement.



Activities article numbers, previously categories:36A Credit broking – the introduction of individuals to

organisations that provide credit or to mortgage advisors (including in both cases FCA regulated individuals or organisations).

ExamplesGiving individuals either lists of banks and building societies that provide first charge mortgages against shared ownership leases/equity mortgage products or lists of mortgage advisers.



Activities article numbers, previously categories:39D Debt adjusting – includes the taking over of debts or

negotiations on behalf of debtors.

ExamplesNegotiate with an individual’s creditors for the discharge of

theindividual’s debts.



Activities article numbers, previously categories:39E Debt counselling – advice for individuals on how to

discharge debts which they have already incurred

ExamplesThis activity applies to the giving of advice to individuals on how to discharge debts which have arisen under a credit agreement or consumer hire arrangement. This is a regulated activity even if the credit or hire agreement is not a regulated agreement.



Activities article numbers, previously categories:39F Debt collecting – the collection of debts under

regulated or exempt credit agreements on behalf of a third party.

ExamplesCollecting debts on behalf of a third party



Activities article numbers, previously categories:89A Provision of credit information services – obtaining

credit information on individuals, such as credit checks, and providing advice on a commercial basis to individuals on how to improve their rating.

ExamplesCredit checks for new tenanciesExperian rent models



Activities article numbers, previously categories:60B(2) Exercise of the lender’s rights either by the lender

or another person undera regulated credit agreement – carrying out any activities

(other than debtcollecting) in relation to that debt.39G Debt administration – acting on behalf of a lender or

owner in exercising rightsunder a credit or consumer hire agreement.89B Credit reference agency – the collation of credit

information on individuals andpassing on to third parties.



Where do you see the impact on your role?



Advice means giving an opinion as a guide to action to be taken, in this case debts. It either explicitly or implicitly steers the customer to a particular course of action.

Could what the adviser says reasonably have been understood by the client as being advice which would help him make up his/her mind.

Any element of evaluation, value judgment or persuasion is likely to mean that advice is being given.



encouragementguidancehelp instructionjudgmentlessonopinionprescriptionpersuasionevaluationproposalrecommendationsuggestion


Information

Paul Langley – 02920674812

07875998795

[email protected]

@paul_chc

http://bit.ly/1DEd3wg - Article

http://bit.ly/1GjdOwe - FCA Handbook

http://bit.ly/1w2by9a - Jargon buster

http://bit.ly/1CuPBBQ - decision tool

http://bit.ly/1wbpk2x - guidance

mailto:[email protected]



http://bit.ly/1GjdOwe

http://bit.ly/1GjdOwe

http://bit.ly/1w2by9a

http://bit.ly/1w2by9a

http://bit.ly/1CuPBBQ

http://bit.ly/1CuPBBQ

http://bit.ly/1wbpk2x

http://bit.ly/1wbpk2x

consumer credit authorisation. community housing cymru cartrefi cymunedol consumer credit...

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