Posted: Friday 27 January 2012
Consumer credit regime moving to FCA control: new Financial Services Bill
By John Lunn
The Financial Services Bill was introduced to Parliament on 26 January 2012. The Bill was published this morning, 27 January 2012, and is available on the Parliament website:
http://services.parliament.uk/bills/2010-11/financialservices/documents.html
As had been widely forecast, the Bill includes provisions (at Clause 6(3) and (4)) enabling an order under section 22 of FSMA 2000 to allow a full transfer of consumer credit regulation to the Financial Conduct Authority (the “FCA”), with retention of substantive CCA provisions. HM Treasury has advised that the Government will exercise these powers if and when it has identified a model of FCA regulation that is proportionate for the different segments of the consumer credit market.
Further detail can be found in paragraphs 4.16 to 4.23 of the Treasury’s accompanying policy document, A new approach to financial regulation: securing stability, protecting consumers, which is published on the Treasury’s website:
http://www.hm-treasury.gov.uk/fin_financial_services_bill.htm
Rather ominously this includes, at 4.23, the following “The Government is confident that a proportionate and effective consumer credit regime in the FCA will be deliverable. However, the Government retains the option to improve consumer protection by enhancing the regulatory powers and approach under CCA, should it conclude that a model for consumer credit regulation under FSMA and the FCA cannot be delivered in a way that improves consumer protection while delivering good regulatory proportionality and value.”
We await developments with interest.
