The FCA has revised charges for consumer credit licences which sees the minimum charge for full authorisation fall from £1,000 to £600.
The regulator previously published its consultation into consumer credit licences in November which stated application fees would be divided into four categories: straightforward cases costing up to £1,000, moderately complex cases up to £5,000, complex cases up to £10,000 and very complex up to £15,000.
In a supplement publication to the consultation, the regulator says it has revised the proposals which see the complex and very complex categories merged.
The regulator classes straightforward consumer credit activities as credit broking or providing credit information services. Moderately complex cases include activities such as operating an electronic system in relation to lending and debt administration.
Complex cases include providing credit references and debt counselling.
The changes mean there are now three categories of licences which range from between a cost of £600 and £5,000 for straightforward cases depending on credit income.
Moderately complex category firms will be charged between £800 and £10,000 depending on income from consumer credit.
Charges rise to between £1,000 and £15,000 for complex cases depending on a firm’s income from consumer credit.
The paper says: “We proposed the previous structure because we believed small firms would fall into the ‘straightforward’ category. It has become clear that this is not the case. A large number of small firms, including firms with income under £50,000, would fall into the higher fee bands. For such firms fees of £5,000 to £15,000 might constitute a significant barrier to entry.
“We are mindful of the need to set fees at a level that should not unduly prevent firms from entering the market.”
The FCA is staggering the authorisation process, and aims to have all firms fully authorised by April 2016. Interim permissions cost £350 for firms, and £150 for sole traders, and will last until firms have to apply for full authorisation.
FCA chief operating officer and FCA lead on transferring regulation of consumer credit from OFT to FCA Lesley Titcomb says: “Since we announced the proposed consumer credit application fees in October we have been listening to the people we met at roadshows, as well as others providing their thoughts on the consultation.
“We appreciate that small firms already face a number of challenges so we want to ensure they can continue to operate successfully under FCA regulation.
“We have listened to what they had to say and now we are making a change immediately: we are proposing that application fees for small firms – those with consumer credit incomes up to £50,000 – will be no more than £1,000.
“We are extending the consultation on that specific proposal for two weeks, until 16 January 2014, to allow people to feed back.”