FCA Consumer Credit Regime Licensing and Compliance Conference

Transcription

1 FCA Consumer Credit Regime Licensing and Compliance Conference 4 December 2013

2 Agenda 09:30 Registration 10:00 Welcome Gerry Keaney, Chief Executive - BVRLA 10:05 About the BVRLA Gerry Keaney, Chief Executive - BVRLA 10:25 The Tougher Regulatory Landscape Explained Jay Parmar, Legal & Policy Director BVRLA 10:55 The Key Milestones Amanda Brandon, Legal & Policy Executive BVRLA 11:05 Coffee Break 11:30 Enhancing Consumer Protection and Smoothing the Transition 12:00 Business Planning and Compliance Review Sam Stoakes, Senior Associate Financial Conduct Authority Jay Parmar, Legal & Policy Director BVRLA 12:15 Q&A Panel Session Chair: Gerry Keaney 12:30 Close & Lunch Panellists: Amanda Brandon, Jay Parmar and Sam Stoakes

3 Gerry Keaney About the BVRLA

4 BVRLA management team Gerry Keaney Chief Executive Jay Parmar Legal & Policy Director David Hanson Membership Development Manager Toby Poston Head of Communications Nora Leggett Head of Member Services

5 About the BVRLA Established 1967 Based in Amersham, Bucks 16 staff Supports three key sectors car and van leasing car and van rental commercial vehicle leasing and rental Over 600 members smallest member - four vehicles largest member Motability Operations

6 BVRLA Committees BVRLA committees Share member views New initiatives Committee of Management (Board) Strategic direction Finance Committee Leasing and Fleet Management Committee Commercial Vehicle Committee Rental Committee Residual Value and Remarketing Committee Leasing Broker Committee Technical and Operational Management Committee

7 Objectives Objectives Campaign in UK and Europe to represent the interests of our members Regulate the industry via a mandatory Code of Conduct and quality assurance programme Provide industry-relevant information Provide low-cost business support services

8 Regulating the industry Mandatory Code of Conduct Guidance on industry best practice Quality inspections for all members Conciliation service B2C and B2B

9 Facts and Figures

10 BVRLA Membership

11 Economic impact

12 Campaigns

13 Campaigning for you Funding Business and motoring taxes Oxford Economics major research project DVLA bureaucracy and working practices Motor manufacturers Electric vehicles Lease accounting

14 Campaigning for you Equality Act age discrimination Airports Driver licence checking Green credentials Transport Research Laboratory consumer renter research Reputation and market positioning Access to insurance

15 Campaigning for you HGV and van best practice LCV Whole Vehicle Type Approval Industry profile Van legislation Authorised Testing Facilities (ATFs) VOSA and vehicle testing HGV Road User Levy

16 Industry information

17 Industry information bvrla.co.uk 30,000 page views per month Member directory Fact sheets and BVRLA Guides Training and accreditation Industry jobs

18 Industry information news BVRLA News Bi-monthly interactive publication News and analysis on key topics 98% readership by members Also available as a downloadable PDF BVRLA Weekly Update industry news updates Sent every Monday as an HTML Received by 3,600+ people

19 Industry information publications Industry fair wear and tear standard cars, vans and trucks Vehicle funding guide VAT guide Driving at work guide Stolen vehicle reporting

20 Why use a BVRLA member? High standards of service Quality Assurance Expertise Campaigning Complaint resolution Sustainable transport

21 Business support

22 Business support training Seminars and Forums Residual Value and Remarketing (RVR) Technical and Operational Management (TOM) Asset Management and Risk Control Key industry topics (lease accounting, tax and compliance, insurance Training and Accreditation Fleet Consultant Programme Short courses in Contract hire and Leasing Technical Customer Service Advisor accreditation City & Guilds Rental Operator Skills Certificate

23 Business support data RISC Database of high risk renters Search by renter name, driver licence number or company name Linked to key proprietary rental systems Real-time updates Monthly usage reports Security Bulletin Vehicle Mileage Database Interim and end of life mileage Available to Experian, HPI and CDL Income shared with members Driver Licence Checking Cost effective, overnight batched checking service

24 Business support conciliation Essential for retaining industry s self regulatory status Conciliation between member and customer (business or consumer) Supported by arbitration panel Key feature for local authority tenders Free at point of access

25 Business support conciliation Total No. Complaints: 555 Resolution Profile 2012

26 Thank you for listening Do you have any questions? Gerry Keaney Chief Executive

27 Jay Parmar The tougher regulatory landscape explained

28 Agenda Why is the FCA taking over consumer credit regulation? What will it mean? BVRLA lobbying

29 Why FCA? Banking crisis Payment protection insurance scandal Overlap of supervision between the OFT and FCA Rules set out in primary legislation making changes difficult Opportunity with the changes from FSA to FCA

30 Who is the FCA? It is one of the UK s main financial regulators Regulates more than 26,000 financial companies and the people who work in them The FCA will aim to make markets work well so consumers get a fair deal.

31 What will it mean A much stricter regulatory regime Rigorous scrutiny from the regulator Reporting requirements Rules rather than guidance

32 OFT Licensing Today Consumer credit licence applied for Categories chosen Fees paid Job done! The Future..

33 There is a view that people are not frightened of the FSA. I can assure you that this is a view I am determined to correct. People should be very frightened of the FSA. (Hector Sants, FSA Chief Executive, March 2009)

34 What will regulation look like? Authorisation Enforcement and redress Approval Supervision of persons

35 Amanda Brandon The key milestones

36 Two levels of authorisation Limited permission: firms subject to more limited scrutiny and reactive supervision due to the limited scope of activities which firms in this category are permitted to carry out Full authorisation: firms subject to rigorous scrutiny, detailed reporting requirements and personal liability.

37 Options for compliance Continue your regulated consumer credit activities Become an appointed representative Stop your regulated consumer credit activities Become an introducer appointed representative You will need to apply for interim permissions by 31 March 2014 You will need to find an authorised firm willing to support you and indemnify you with the FCA For example you could only sell unregulated consumer credit agreements This will mean all you can do is introduce customers to principals You can offer no advice to customers

38 Timetable for implementation September 2013 notifications from CCA- licensed firms for interim permissions April 2014 February 2014 Final rules published Transfer to FCA Autumn/Winter 2014 applications for authorisation from firms with interim permissions Spring/Summer 2016 Authorisation process completed

39 BVRLA lobbying successes Leasing brokering classified as lower risk Recognition of BVRLA Code of Conduct Definition of peer to peer lending platform Clarity for firms with debt counselling debt adjusting categories on their licence

40 Sam Stoakes Enhancing consumer protection and smoothing the transition

41 The future of consumer credit regulation Sam Stoakes Financial Conduct Authority 42

42 Timetable April 2014 FCA takes over from OFT February 2014 rules finalised October 2013 rules consultation paper October 2013 fees consultation paper 43

43 About the FCA FCA objective: to make markets work well We authorise firms and certain individuals can only carry out regulated financial services if they are authorised by us We supervise depending on the size and nature of the business We enforce when firms and individuals don t play by the rules 44

44 45

45 What do you need to do? Register with us for interim permission this allows you to carry out consumer credit activities after 1 April Registration fee: 150 sole traders 350 other firms 46

46 If my details change after registering for Interim Permission, I will need authorisation Any changes to the address or contact details should be notified to the OFT and the FCA If you vary your credit licence with OFT before 1 April 2014 (after you have registered for interim permission) the interim permission will be based on the licence categories actually held with the OFT on 31 March 2014 If you don t update your details, you may be operating illegally from 1 April 47

47 operating an electronic system in relation to lending does this apply to vehicle leasing brokers? The new regulated activity of operating an electronic system in relation to lending is intended to apply to peer-to-peer lending It is not aimed at arrangements between lenders and vehicle leasing brokers It is not intended to apply to credit brokers or price comparison websites 48

48 Once you have registered Your firm will appear on our public register on 1 April Between April 2014 and March 2016: apply for authorisation; or become an appointed representative; or cease consumer credit activities 49

49 Authorisation Our equivalent of the OFT licence You will need to complete a more detailed application and demonstrate that you meet minimum standards Standards depend on type, size, potential risks Different requirements, based on whether you apply for limited permission or full authorisation 50

50 Firms must wait until their allocated authorisation slot before applying for authorisation this could delay me becoming an AR We will announce planned landing slots early in the New Year as a way of phasing the authorisation process and avoiding bottlenecks However, firms can apply earlier if they wish for example, because they wish to have appointed representatives Where firms intend to become a principal, we will prioritise their applications accordingly In general, firms in lower-risk categories are likely to be called for authorisation later than higher-risk firms 51

51 Appointed representatives Can only be an appointed representative (AR) if a firm is willing (and suitable) to act as your principal Principal must be fully authorised and have permission for the activities that will be undertaken by its ARs You can have more than one principal AR option not available to some firms (lenders that apply interest and/or charges; ARs cannot hold client money) Having a limited permission for some credit activities does not rule you out from being an AR for others 52

52 Who can be a limited permission firm? Firms who carry out lower-risk activities such as secondary credit broking (including vehicle leasing broking) Limited permission firms can also carry out debt adjusting or debt counselling (which normally needs a full authorisation ) if ancillary to their main credit business Limited permission firms cannot be fully authorised for other activities 53

53 Key features of limited permission regime Streamlined authorisation process Threshold conditions modified Only one approved person needed Slimmed down reporting requirements Lower fees Firms may become appointed representatives 54

54 There are onerous requirements for submitting data to the FCA under the new reporting regime Data requirements will be minimal for most firms transaction volumes, how much you earn from consumer credit products, complaints and firm specific financial data Data to be submitted annually online If you are an AR, you won t need to report anything to the FCA, that is for your principal to do 55

55 FCA fees We will consult on our annual fees in March 2014 Appointed representatives are not charged FCA fees Rebates on OFT fees: expect Government announcement shortly Proposed application fee limited permission 100 for firms with annual credit income up to 50k; 500 for others Proposed application fee full authorisation 1,000 for straightforward; 5,000 for moderately complex application; 10,000 for complex 56

56 Actions to take now 1. Check all the information on your consumer credit licence is correct 2. Register for Interim Permission: 3. If you have subsidiaries, check whether they need permission in their own right 4. Check whether the firms you deal with (eg lead generators, debt collectors) need permission and whether they are aware of this 5. Sign up for updates from the FCA: 57

57 Action to take (2) 1. Prepare to amend status disclosures and documents (eg credit agreement, SECCI) 2. Familiarise yourselves with the changes we have proposed (CP13/10) The draft rules and guidance largely replicate existing provisions in the CCA and OFT guidance A 6-month transition period to allow further time for systems changes Transition period applies if you can demonstrate compliance with existing CCA rules/oft guidance 58

58 I will need to amend my documentation twice first to refer to Interim Permission, and then to refer to Limited Permission or Authorisation The status disclosure rules have been changed in our latest Consultation Paper. Firms must indicate from 1 April that they are authorised and regulated by the FCA, but they won t need to state what type of permission they hold So only one set of changes will be needed 59

59

60 Jay Parmar Business planning and compliance review

61 What next? Review your consumer credit licence categories Apply for interim permission Business planning Document process and procedures Training plans

62 Working for you

63 What we are doing? Monitoring FCA changes Industry code evaluation Training/accreditation Fact sheets or guides Continuing to lobby on your behalf

64 Thank you for listening Do you have any questions? Panel Session