Consumer Credit Regulation – UPDATE

This is an update to the announcement of 21 January 2015 (see below)

The regulation of solicitors’ consumer credit work by the Financial Conduct Authority (FCA) has been postponed again.  The FCA has agreed to the Solicitors Regulation Authority’s (SRA’s) request to extend the current transitional arrangements until 31 October 2015; they were due to run out on 1 April.

The Law Society remains concerned about the impact dual regulation would have had on both the public and the profession. It will continue to work with the SRA over the coming months as it considers the way ahead and will encourage the SRA and FCA to avoid costs and potential confusion by having the work of solicitors covered as far as possible by a single regulator.

21 January 2015

The Financial Conduct Authority (FCA) has agreed to our request for another extension to the transitional arrangements for regulation of consumer credit activities.

We asked for the extension to give us more time to plan the best way forward for regulating law firms that carry out consumer credit work. Our Board agreed to make the request at its meeting today to which the FCA has agreed. The transitional period, previously due to end on 1 April 2015, will now run until 31 October 2015.

Enid Rowlands, Chair of the SRA Board, 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 OFT to the FCA 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.

“We will keep firms up to date with any changes that may affect them as and when we know.”