Update Consumer Credit timeline 1 st April applied for interim - PowerPoint PPT Presentation

Consumer Credit Update

Consumer Credit timeline  1 st April applied for interim permissions  1 st May FCA will write to firms giving them a 3mth window for full applications  Firms will be able to apply to vary their permissions and use the FCA connect service to do so  No further applications will be allowed after 31 st March 2016

Consumer Credit application window  By 1 st May firms will receive written confirmation of their application window ↓ Category Sub- Region Region Region Region of category Group 1 Group 2 Group 3 Group 4 business of North London & Scotland, Central International business NI, South and East From 1 st From 1 st From 1 st From 1 st Credit Broker Brokerage (FCA Oct 2014 Oct 2014 November November authorised but before but before but before but before 1 st January 1 st January as Home 1 st 1 st Finance 2015 2015 February February Firm ) 2015 2015

Do I need a consumer credit licence?  Only transacts regulated Mortgages/investments under FCA Do not allow clients time to pay for services .  Do not refer clients to 3 rd parties for consumer credit activities including  debt counselling, adjusting etc. or 2 nd charge lending Only advise clients to consolidate their unsecured debts into a specific  regulated mortgage contract Do not advise on BTL mortgages   These firms are unlikely to need a consumer credit licence

Do I need a consumer credit licence?  All other firms who advise on regulated mortgages/BTL/Investments etc. Refer clients to 2 nd charge packagers or credit brokers  Refer clients to debt management firms where the firm only offers one debt  management solution. (19 examples in PERG) Allow clients to pay any fees due to them for services via monthly  instalments or a regular on-going maintenance fee Referring clients for unsecured or credit card finance  Carry out BTL mortgage business   These firms are very likely to need a consumer credit licence and may have already applied for interim permissions

What type of permissions under Consumer credit do I need  Limited permission activities These firms present a reduced risk to the FCA, lower fees and shorter application process. Examples are; Consumer hire (tool/Car hire), credit broking where this is a secondary activity Motor dealership, retailers introducing clients to a finance provider .  Full permissions activities These firms are likely to be the majority of Mortgage brokers examples are; credit broking where introducing clients to Lenders is a main business activity, debt administration, counselling, adjusting or collection  Decision tool on the FCA website http://www.fca.org.uk/firms/firm-types/consumer-credit/authorisation/prepare

What is it going to cost me?  Based on Firms estimated income from Consumer credit activities:-  £300 -£2500  Do Not include income from regulated mortgage contracts

What Next?  Paradigm are going to update website with a Consumer Credit page “how to plan and prepare for consumer credit regulation”  Paradigm Technical Helpdesk have already sent out a number of communications  Paradigm will offer further bulletins and support updates on Consumer credit  Visit www.paradigmmortgages.com and click on Consumer credit or ring Christine to discuss further