The chair of the Solicitors Regulation Authority (SRA) has said the end is in sight of its “long, long journey” on consumer credit after a last-minute deal with the Financial Conduct Authority (FCA).
Enid Rowlands said there had been “a lot of anxiety in the profession” about the issue, but the regulator had avoided the Scottish situation, where an extra 500 pages had been added to the rules.
“It could have gone another way,” she told a press briefing after this week’s SRA board meeting. “The FCA could have dug in its heels”.
In a consultation launched this summer, the SRA proposed that it should go on regulating most mainstream consumer credit activities as long as they were central to the legal services solicitors provide. The regulator had suggested last year that it might have to stop regulating consumer credit activities completely.
Crispin Passmore, executive director for policy at the SRA, told the board meeting that the FCA had agreed a final set of rules “late last night”, delayed partly by a technical issue over credit references.
“We’re happy that we can now regulate this in a proportionate and targeted way which allows firms to carry on with their work,” he said.
The board decided to make the draft amendments to the rules as agreed with the FCA. Subject to formal approval from the FCA and the Legal Services Board, the new rules will come into effect on 1 April 2016. SRA guidance is expected to be published in the autumn.
Mr Passmore told journalists afterwards that the SRA did not want to incorporate 200-300 pages of FCA rules into its handbook. “We were able to convince the FCA that we don’t need that sort of detail,” he said. “We’ve ended up with eight pages of rules on consumer credit.”
Mr Passmore said one of the main changes was an extension of the exemption from FCA regulation for activities undertaken by solicitors in the course of pre-issue work as well as contentious business.
The Legal Services Consumer Panel said last month that it was particularly concerned by the change.