The Consumer Credit Sourcebook
CONC has arrived.. the devil is in the detail!
On the whole, CONC appears to reflect the majority of the existing CCA Regulations and OFT guidance. However, there are some things to watch out for!
The important message at this stage is that all lenders, brokers, credit intermediaries (and others) need to prepare themselves for 1 April 2013/4. The FCA itself accepts that the time table is "very challenging" so take this as a warning and act now.
The FCA published its consultation paper (CP13/10) incorporating the draft Conduct Rules for the consumer credit industry. These will apply from 1 April 2014. As we know, as at 1 April, the high level rules set out in PRIN, SYSC and GEN will also apply to all consumer credit firms.
However, the main points to note are as follows:
- the transition process for firms is intended to be straight forward and proportionate including any additional costs and burdens which will be proprotionate to the securing of appropriate consumer protection and competition.
- traditional standards set out in the CCA, secondary legislation and OFT guidance will be transferred to the FCA and will become FCA rules.
- firms will be able to apply for authorisation from April 2014, rather than in the Autumn as previously suggested.
- data reporting requirements will only apply once firms become full authorised.
- capital requirements will only be imposed on debt management firms and some not-for-profit advice bodies.
- firms will not need to disclose that they hold interim permission, which will reduce the number of changes they will need to make to their letterheads and other stationary.
- firms will not need to appoint Appointed Representatives or report complaints until they are fully authorised.
- the FCA's requirements for advertising will, broadly, reflect the existing provisions.
- the FCA will not apply a customer function (in connection with Approved Persons) to any consumer credit activity currently.
- the FCA has updated its list of lower-risk activities to include the broking of lease contracts.
The FCA are still to provide further detail on how firms will be called forward to apply for full authorisation after October 2014 and we await further news on this subject.