NEWS...
CSA and DBSG Industry Feedback
The government is aiming to create one organisation to cover consumer credit – removing those powers from the OFT. In response, the CSA and DBSG are working with other industry trade bodies to develop a suitable joint response.
The new body – the Financial Conduct Authority (FCA) – is being created to streamline the industry, with the government favouring a consumer credit regulatory regime, similar in style to the 'rule book' the FSA currently uses.
Dr Roger Lucas, president of the CSA, explained: “Not all regulation is bad, but it has to be crafted in the right way to ensure the overall desired objectives are met and we have seen evidence of that achieved successfully over the last few years, working closely with the OFT.”
Some within the industry are concerned that little thought seems to have been given to debt collection. However, the CSA is eager to grab this opportunity to lobby the Treasury through the consultation and will be using its input to help shape the contents of any proposed debt collection 'rule book'.
One of the key issues in the potential repeal of the Consumer Credit Act 1974, while CSA and DBSG members may also be subject to other regulation – including capital adequacy and a form of 'authorised persons' policy.
However, Dr Lucas believes the work already being undertaken by the CSA and DBSG will be useful to the new regulator: “I believe the Collector Accreditation Initiative and Member Audits alone will be of significant interest to the new regulator as it seeks to find ways to manage the licensing of our industry and fit in really well with the government's plans to reform consumer credit.”
Ian Orrill, Compliance Executive for the CSA and DBSG, added: “Fees for funding the new regulator are likely to be higher than the current OFT licence fees.”
Currently, the FSA charges a one-off application fee and an annual periodic fee. FSA fees are higher than the current OFT fees and therefore many companies will experience an increase in costs. The FCA will also collect all the fees currently going to the FOS, Financial Services Compensation Scheme and Consumer Financial Education Body.
The full consultation can be found online at www.hm-treasury.gov.uk/consult_consumer_credit.htm.
Original article courtesy of CSA.
