Following close working between the Solicitors Regulation Authority (SRA), HM Treasury and the Financial Conduct Authority (FCA), HM Treasury has agreed to changes in consumer credit regulation which will further help to reduce regulatory burdens on firms.
Certain consumer credit activities, such as debt collecting, will now be excluded from regulation under the Financial Services and Markets Act 2000 where those activities are undertaken by solicitors – or others authorised under the Legal Services Act 2007 – in the course of providing advocacy services or litigation services. The definitions of these services would include pre-issue work. These changes will be particularly beneficial to firms, without any detrimental effect in terms of consumer protection.
HM Treasury was also asked to increase the number of repayments before an agreement with a client is a regulated credit agreement. From 18 March 2015, the number of repayments that fall within the exemption in article 60F of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 (RAO), has increased from four to twelve.
The FCA agreed a further extension to the transitional arrangements for consumer credit regulation, with the current transitional period ending on 31 October 2015. The SRA is currently in discussions with the FCA about the way in which these activities will be regulated after that date.
Crispin Passmore, SRA Executive Director for Policy, said: “We welcome these changes which will further help to reduce regulatory burdens on firms providing consumer credit services. We continue to work with the FCA on an effective way forward in regulating law firms for consumer credit in a way that protects the public, at the same time taking into account the way solicitors work and the SRA’s regulatory approach. We will keep the profession updated on progress.”
Further information on the changes made by HM Treasury and the current position on consumer credit work can be found on the SRA website here: