The government announced earlier today (6 March) that it will transfer responsibility for regulating consumer credit from the Office of Fair Trading (OFT) to the Financial Conduct Authority (FCA) by 1 April 2014.
The FSA’s consultation sets out the overall approach and framework for the regime that will be administered by its successor body the FCA. The framework will enable the FCA to deliver better outcomes for consumers than the existing regime with the following tools:
- Increased flexibility e.g. rule making powers, including product banning;
- More resource;
- The ability to tackle problems earlier through access to more information about firms, the scope to take a market-wide approach by requiring action from all firms in a sector and proactive supervision of higher risk firms;
- There will be more scrutiny of higher-risk firms before they are allowed to operate in the market and significantly more scrutiny of the integrity and competence of the individuals in key positions in all firms;
- The FCA will have the power to require firms to reimburse consumers when they have lost out due to a firm’s actions; and
- The FCA will be able to apply its full enforcement powers including banning firms and individuals and imposing fines.
Read more here Consumer credit regulation – FSA proposed regime.