Just when you thought it was safe to venture out after the MMR, along comes more legislation in the form of the Consumer Credit Act.
If I told you that at a recent House of Commons select committee, evidence was given by a money lender that they had charged a customer 3,000 per cent interest, you might not be surprised given the current profile of payday lenders on daytime TV and in the popular media. However, what may surprise you is that the select committee evidence was in fact presented to the House in 1898.
So much for the slow wheels of government turning ever more slowly. Let us just hope this time around the FCA gets this complex area sorted for the benefit of us all.
I have high hopes, as it has started off on the right foot by unwinding some of the complexity for advisers with mortgage permissions by not requiring debt counselling permissions under their consumer credit licence when discussing with clients debt consolidation into a first charge mortgage.
So not requiring a licence for this activity when well qualified mortgage advisers are separately licenced with the FCA under MCOB, looks like common sense all round.
There is, of course, a long way to go and many months of consultation will be required, but, through the good work of the Association of Mortgage Intermediaries, this is one of our top priorities to progress with the FCA.
The FCA took over the CCA legislation from the OFT on 1 April and with over 50,000 licensees, it will take a while to unravel all the intricacies. It has set up an interim permissions period which covers a licensee until the full regime has been fully transferred and streamlined.
The FCA thinks this will be about two years. In the mortgage world this will give the regulator time to look at the second charge regime, perhaps bring that under MCOB, improve standards here further and reduce costs.
The FCA has set out its stall to address as a priority the activities of lenders and debt management firms which interact with some of our society’s most vulnerable consumers.
The media headlines will in the short term focus on the payday lenders, but the CCA covers a broad church and it is important for us all to improve and contribute to make this legislation work much better for both consumers and mortgage advisers in the future.
John Cupis is managing director of mortgages at Sesame Bankhall Group and Deputy Chairman at the Association of Mortgage Intermediaries