SPECIAL FEATURE: Preparing for CCA permissions
The consumer credit industry is currently in the midst of a transitional period, following the Financial Conduct Authority’s replacement of the Office of Fair Trading as the regulator for consumer credit last year.
Subsequent changes to the CCA mean as of 1 March 2016 any firm planning on performing consumer credit activities must be authorised by the FCA.
With applications taking up to six months, thorough preparation is key to ensuring your businesses is fully authorised in time for both your application process and the change.
The FCA’s authorisation requirements are far stricter and more comprehensive than the OFT’s previous regulatory regime required of consumer credit brokers.
Firms and individuals will need to provide adequate proof that their business models are responsible and sustainable, putting the client’s interests first.
This doesn’t just mean more paperwork for you and me – the intention is that some businesses will fail to secure authorisation, essentially filtering out the firms that aren’t operating at a high enough standard.
Don’t let this panic you though, if your business plays by the book there’s no reason why you shouldn’t be able to secure authorisation if you give it the appropriate level of time and attention.
I share the view of many in the industry in thinking that tighter regulation is a positive move. In my eyes, raising the bar can only result in a more sustainable industry and better client outcomes.
At Vantage Finance we pride ourselves on our high standards and expert service, but this shouldn’t be a unique selling point. Professional practice should be standard across any industry, and the FCA’s new changes promise to ensure a safer, more secure environment for both businesses and clients.
I would recommend any business considering an application to seek professional advice before and throughout the application process.
Here at Vantage we sought advice as soon as the changes were announced and had our application ready to go at the beginning of our landing slot.
For businesses already regulated through the FCA a variation of permission adds consumer credit activities to your authorisation without having to go through the full FCA application process again.
We were allocated a landing slot like all businesses with interim permissions and ensured our paperwork was fully prepared well in advance to achieve as swift and smooth an application as possible.
That being said, the process still took the best part of three months.
It’s important to keep in mind that this application is new for both the applicant businesses and the regulator itself. Unlike the OFT’s rather simplistic regulation process, the FCA is interested in gaining a deep understanding of every consumer credit business, and how they’re contributing to the wider industry.
It’s no longer a question of if you practise consumer credit, but how.
Whether you’re a new business planning to launch into the market, or an existing brokerage with years of expertise, if you plan to provide any form of consumer credit service the CCA applies to you.
And if you haven’t already applied for your authorisation, the clock is ticking.
With external firms offering support throughout the entire application process, the correct advice and provision will save you time and resources.
However you prepare for authorisation, make sure that come March 2016 you’re not left on the back foot.