Around 70 fee-charging commercial debt management companies are still in limbo over whether they will gain full authorisation from the Financial Conduct Authority (FCA).
In an exclusive interview with Credit Strategy, the FCA’s chief executive Andrew Bailey said that, as of February 10, there are still 210 consumer credit firms waiting to be authorised. He added that around a third of these are commercial debt management firms.
Disclosing the reason the authorisation process for consumer credit firms has taken longer than expected, Bailey said: “We operate to standards; we’re not just shovelling through.”
When asked when he would know about the stability of the commercial debt management sector going forward, Bailey added: “We’ve had to use this (authorisation) process to set expectations of what we want to see. There are some issues we will sort out post authorisation.”
He added: “We’ve been working to set the hurdle but not to set it unrealistically. But I have to say our expectations have evolved because we’ve now got a much better line of site of the industry and what we expect, so we’re well on down the track.
“The interesting thing, which in a sense illustrates why this is a pretty dynamic sector, is that while we’ve been doing this interim authorisation process, we’ve also had a big influx of new authorisations, so it’s a dynamic sector.”
During the interim authorisation period around 24,000 firms left the consumer credit market due to the fact their interim permission had lapsed or been cancelled.
At the same time nearly 11,000 new consumer credit firms submitted applications for authorisation.
You can read the full interview with Andrew Bailey in the upcoming April issue of Credit Strategy.