Do you need to apply to the FCA to move your landing slot? If so act without further delay
Where you carry on Consumer Credit Act (CCA) activities you should currently hold interim permission to carry on these activities.
All organisations holding interim permissions have to apply to the Financial Conduct Authority (FCA) by 1 April 2016 for full authorisation to continue to carry on their CCA activities. The FCA will have given such organisations a 3 month period (Landing Slot) within which to apply for full authorisation. If you fail to apply within your Landing Slot your interim permission will lapse and you will be unable to continue to carry on such activities (unless you fall within an exemption).
Organisations will have to apply for either full permission for activities considered to be high risk or limited permission for activities considered to be lower risk. The on-going FCA requirements to be met by organisations holding limited permission will be less onerous, than for those holding full permission. The application process will also be simpler.
Since October 2004 all first residential mortgages are regulated by the FCA under a robust mortgage regime. The FCA has put in place a range of rules by way of primary and secondary legislation to ensure that firms act responsibly when undertaking their mortgage activities.
Second residential mortgages are still regulated under the CCA regime but as of next year both first and second residential mortgages will be governed by the FCA’s mortgage regime as a result of the EU Mortgage Credit Directive (MCD). The MCD must be implemented in the UK by 21 March 2016. The FCA will go further than to just implement the MCD by applying additional protections from their first residential mortgages to second residential mortgages and generally tightening up protection for consumers.
Based on the current regulatory regime under the CCA, Housing Associations will have to apply for full permission where they carry out lending secured by way of second residential mortgages, for example, for homebuy and certain mortgage rescue products (unless falling within a current exemption). As of 21 March 2016 all lending by Housing Associations secured by way of residential mortgages (whether first or second mortgages) will be governed by the FCA’s mortgage regime and Housing Associations will need to be authorised by the FCA under its mortgage regime to undertake such lending unless the lending falls within limited exemptions under the MCD. This is a separate authorisation to authorisation to undertake CCA activities.
The FCA published its final rules at the end of March 2015 and we are currently advising our Housing Association clients to undertake a review of their business models and activities to establish which of their activities will be caught and which will be exempt as a result of the MCD.
We are assisting our Housing Association clients in applying to the FCA to have their Lending Slots moved to the latest date possible ie between January and end of March 2016 to give them sufficient time to consider the impact which the MCD will have on their activities. It is likely that homebuy and certain mortgage rescue products entered into by Housing Associations on and after 21 March 2016 will be exempt under the MCD and accordingly will not require authorisation from that date under either the CCA or the mortgage regime.
Please let us know if you wish us to advise you on your activities and/or assist you in applying to the FCA to move your Landing Slot.