SRA updates consumer credit work guidance

SRA updates consumer credit work guidance

The Solicitors Regulation Authority (SRA) has updated its guidance for firms involved in consumer credit work.

Until the 1 April, firms were able to rely on a Law Society group licence. However, following the passing of consumer credit regulatory duties from the Office of Fair Trading (OFT) to the Financial Conduct Authority (FCA), those firms engaged in consumer credit work need to assess their own licensing needs and approach the FCA if necessary for the relevant authorisation.

To take account of the changes, the SRA updated its Financial Services (Scope) Rules last week. Now, they have also updated the guidance (first published last year after the licensing arrangements were announced) to help firms work out how the change affects them.

The guidance, entitled “Regulation of consumer credit activities”, can be found on the SRA web site at www.sra.org.uk/sra/policy/regulation-consumer-credit-activities. It includes information for law centres who relied on the group licence, reference to the OFT’s licence fee rebate scheme and information about delayed/staged payments of professional fees.

Affected firms should have applied to the FCA for interim permission, or have ceased to carry on consumer credit activities. Firms should already be familiar with the Part 20 regime in relation to financial services, but this will now also be relevant to consumer credit activities. Firms now carrying on consumer credit activities without interim permission from the FCA or falling within the Part 20 exemption will be in breach of FCA regulations.

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