The Financial Conduct Authority has attempted to clarify some of the misunderstandings about who needs consumer credit permission and the interpretation of its rules and guidance on assessing creditworthiness and affordability. This is very helpful, but frankly has barely scratched the surface.
Long standing official resistance to shifting the regulation and supervision of consumer credit to the Treasury/FSA meant there was little time to do more than 'drag and drop' the old Consumer Credit licensing regime operated by the Office of Fair Trading into the FCA's world. But a lot less drag and a lot more drop would have saved great deal of time and expense.
Meanwhile, the confusion over permissions required and the 6 to 12 month authorisation time is driving many new entrants to launch into business lending space even where they would prefer to focus on consumers, sole traders and small partnerships.
The Innovation Hub is a great initiative, and a number of clients have taken advantage of this so far, but let's hope there is a solid programme for clearing the regulatory drag that is inhibiting more competition and innovation.
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