Search

Dear visitor,
You are viewing 1 of your 5 free articles


To view more free articles, please register

Free registration or Login

The seal of regulatory approval

As members of the Credit Services Association (CSA) encounter the final few weeks before full authorisation is given by the regulator, John Ricketts, vice president of the CSA, explores the numbers yet to reach the finish line.

When the move to a new regulator was first mooted, there was some understandable concern as regards the resource and understanding needed to transition the industry to a new regime under the Financial Conduct Authority (FCA).

A particular concern was the time it would take to obtain formal authorisation, and both the uncertainty and the additional investment that a business would have to go through as a result. While businesses have indeed had to meet the increased cost in compliance, some of the initial concerns, at least, have not been realised. The authorisation process has continued at pace, and accelerated quite dramatically in recent months. As at July 4 2016, 89 (82 percent) of the 109 CSA full members that applied for full FCA authorisation post interim permission are now fully authorised.

 

To put that into context, that number has increased significantly from the 52 percent when we last looked at the figures in April of this year.

 

The end in sight

Looking at the statistics as part of the CSA’s quarterly Data Gathering Initiative (DGI), there are now only 20 CSA full members that are still waiting for the final nod from the FCA to bring the authorisation process to a close. Of those 20, seven are debt buyers, and the balance are debt collection agencies or similar. The rush to the finishing line is not immediately explained, but perhaps it has something to do with news released by the FCA that its consumer credit authorisations team will be disbanded by the end of September to be replaced by a team that is described as being non-sector-specific.

 

The consumer credit authorisations team was set up specifically to deal with the expected large volumes of firms applying for authorisation as part of interim permission. Now almost all of those with interim permission are being processed, the specific team will no longer be needed. The new team will still deal with consumer credit applications from new entrants.

 

Number crunching

The task has been long and arduous: out of the CSA’s 270 full, foundation and affiliate members, 76 percent (206) originally registered for interim permission with the FCA in April 2014 and 64 (or 24 percent) did not. However, of those 206 that did, 11 (five percent) subsequently cancelled their interim permission and a further 56 (27 percent) did not eventually submit a regulatory business plan and allowed their interim permission to lapse.

 

The net result was that only 139 (68 percent) of the 206 members who originally registered for interim permission actually progressed to apply for full FCA authorisation.

 

Of the 139 that submitted regulatory business plans, we now have in total 110 (79 percent) across the line with full authorisation, and the remaining 29 (of which 20 are full members) still at interim permission stage. The pace of authorisations has undoubtedly slowed; after a flurry of activity that saw 47 members authorised during March, April and May, only four were authorised in June. The FCA may, of course, have been distracted by recent geo-political events. I would be surprised if it had not, in keeping with most of the country.

 

Let us hope, however, for one more concerted push to the finishing tape, to allow all of our members to enjoy the seal of regulatory approval.

Share on Twitter Linkedin black
YOU MIGHT ALSO LIKE

Last chance: Sign up for our webinar this Thursday on credit agreement automation

As lenders face a perfect storm of soaring unsecured consumer debt, closer regulatory scrutiny and claims firms chasing the new PPI, this Thursday’s webinar with Dealflo will explore how automating credit agreements can reduce risk and improve the customer journey

Credit Summit – full agenda revealed

The full agenda of the Credit Summit, for which Grant Thornton has signed up as headline sponsor, has now been revealed

CYBG increases PPI provisions by over £400m

CYBG has increased its PPI provisions by £403m and is required to fund nearly 10 percent of this cost under terms agreed with National Australia Bank (NAB)

Reaction to interest rate rise: Danger ahead or don’t believe the hype?

Personal finance experts have today responded to the interest rate rise to 0.5 percent, with views split between fears for borrowers just about managing, and those who think mortgage borrowers will avoid financial ruin
LATEST IN ANALYSIS

The CS Interview

The patriot

The patriot

Features

Beyond defining vulnerability

Beyond defining vulnerability

Opinion

The Editor's View: "A mixed picture"

The Editor's View: "A mixed picture"

Bank NPL analysis

Banks continue purge of bad debt from balance sheets

Banks continue purge of bad debt from balance sheets

Upcoming events

Credit Week 2018


Credit 500 Gala


Credit Awards 2018


Car Finance Conference 2018

Credit Strategy

Did you find our website useful?

Thank you for your input

Thank you for your feedback

creditstrategy.co.uk – an online news and information service for the UK’s commercial and consumer credit industry. creditstrategy.co.uk is published by Shard Financial Media Limited, registered in England & Wales as 5481132, Axe & Bottle Court, 70 Newcomen St, London, SE1 1YT. All rights reserved. Credit Strategy is committed to diversity in the workplace.
@ Copyright Shard Media Group