FCA's Final Consumer Credit Rules

The FCA has published its final consumer credit rules, including its response to the feedback it received during the recent consultation process.

In its email alert, the FCA claims not to have significantly altered the rules that it consulted upon other than in relation to high-cost short-term credit, including amending the risk warning for financial promotions and rules on using continuous payment authorities.

However, the scope of peer-to-peer lending has been amended slightly in a new statutory instrument to add conditions necessary for the platform's operations to be within scope. In summary, the platform operator (or another person acting under an arrangement with it or under its direction), must undertake to: 

• receive payments in respect of interest and capital due under the loan contract and to make payments in respect of interest and capital due to lenders; and 

• perform, or undertake to appoint or direct another person to perform, either or both of (a) taking steps to procure the payment of a debt under the loan contract; (b) exercising or enforcing rights under the loan contract on behalf of the lender.

In addition, any activity of a kind specified by article 14 (dealing in investments as principal), 25 (arranging deals in investments), 37 (managing investments) or 53 (advising on investments) are excluded from article 36H (operating an electronic system in relation tolending). 

The FCA also says it has provided new guidance on lending in the course of a business, but this is not immediately apparent, so stay tuned there.

The FCA Handbook will be updated in March to include the consumer credit rules as "CONC".

New OFT Guidance on Consumer Credit Licence Applications

The OFT has published guidance on how it proposes to handle consumer credit applications in the lead up to the handover of its consumer credit responsibilities to the FCA on 1 April 2014. 

Basically, if the OFT can't process your application by 31 March, it will pass it to the FCA to process in accordance with the FCA's requirements. 

If the OFT does grant your licence before 31 March, you will need to apply to the FCA for interim permission to operate until such time as the FCA asks you to go through a full FCA authorisation process (which will be some time before 31 March 2016).

If you plan to apply for consumer credit authorisation on or after 1 April 2014, the FCA has some FAQs here.