FCA agrees to another extension on consumer credit regulation

Print This Post

22 January 2015


SRA: seeking counsel's opinion

SRA: seeking counsel’s opinion

The regulation of solicitors’ consumer credit work by the Financial Conduct Authority (FCA) has been postponed again.

The FCA has agreed to a Solicitors Regulation Authority (SRA) request extent the current transitional arrangements until 31 October 2015; they were due to run out on 1 April.

By then it will have been more than a year since the transitional provisions were meant to have ended.

In the meantime, the SRA and Law Society will jointly instruct leading counsel to provide a clear definition of what falls within the scope of consumer credit work. The Law Society argues that thousands of firms could be affected, saying it extends as far as allowing clients to pay by installments.

Error, group does not exist! Check your syntax! (ID: 14)

SRA board chair Enid Rowlands said: “We are committed to finding the best possible solution for law firms and the users of legal services. Moving responsibility for consumer credit regulation from the Office of Fair Trading to the FCA [which occurred on 1 April 2014] is an opportunity to review how oversight of the work of law firms engaged in various forms of consumer credit activity should be delivered.

“We have had open, constructive and positive discussions with the FCA about how our differing models of regulation can work together to provide proportionate and effective protection. However, this is a complex and important area and we felt more time was needed to allow the options to be properly and thoroughly explored. The FCA has agreed, and we will continue to work closely with them.”

Solicitors’ firms undertaking consumer credit work were regulated under the Office of Fair Trading through a group licence granted to the Law Society. There is no equivalent group licence scheme at the FCA. This led to the SRA’s proposal to shift regulation to the FCA, which had a very mixed response.

Tags: ,



Leave a comment

* Denotes required field

All comments will be moderated before posting. Please see our Terms and Conditions

Legal Futures Blog

Lawyers must now draw on the data and drive change

Chris Marston 2014

The results from this year’s legal services consumer tracker survey make for interesting reading. In its sixth year, the research finds that a firm’s reputation continues to grow in importance, holding its top slot as the number one factor influencing choice of lawyer, with price remaining a strong second, reflected in a shift towards higher numbers of fixed-fee transactions. Alongside, it reports that trust in lawyers has declined to 42%, from 47% in 2012. It’s useful information as far as it goes, but what is the sector going to do with it?

September 26th, 2016