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FCA cuts consumer credit licence fees

Sam Cordon

December 16, 2013

Those seeking complex authorisation will see the maximum dropped from £25,000 to £15,000.

The FCA amended its proposed fees after discussions with firms and trade bodies that had said the costs could prove a significant stumbling block for smaller firms.

The FCA said: “During November 2014, we held ten road shows across the country to engage with firms and trade bodies about our proposals in CP13/10 and on the fees structure for the new consumer credit regime.

“It became clear from these discussions, and from the first responses, that our proposed application fees might constitute a significant barrier to entry for some small firms.

“Rather than wait until we provide formal feedback after the consultation period closed, we decided it would be more helpful to firms to issue amended proposals as soon as possible.”

The regulator said that excluding small firms from the market would reduce the range of choices available to consumers and restrict opportunities for entrepreneurial start-ups to challenge existing market participants.

It said: “We therefore propose to modify the complexity categories to take account of the size of business. Adapting the model we proposed for limited permissions, we would scale the charges within each category according to firms’ consumer credit income.

“To keep the matrix as simple as possible, we are also merging the ‘Complex’ and ‘Very complex’ categories.

“We are proposing to charge some of the smaller firms less than the minimum of £1,000 in our original structure.

“The smallest home collected credit lenders and debt management firms would pay a fee of £1,000 while the smallest brokers would pay £600.

“We are restricting the fee-bands for the largest firms to the maximum of £15,000 we had proposed for ‘Very complex’ applications.

“We believe our revised structure should ensure that application fees will not be a significant barrier to entry.”


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