The Association of Mortgage Intermediaries (AMI) says it supports an appointed representative (AR) option for Consumer Credit. However it has questioned whether it is time to address the issue of regulatory duplication.
The Financial Conduct Authority (FCA) has published details of its proposed regime for consumer credit. Whilst the focus of the document is on the new requirements for consumer credit firms, there are some implications for mortgage brokers due to the requirement imposed on them to hold a consumer credit licence.
The FCA has confirmed that an appointed representative regime will be applied to consumer credit under its regulation of the industry.
Robert Sinclair (pictured), chief executive of AMI, said: “AMI welcomes the FCA’s commitment to allow for an appointed representatives regime to exist for consumer credit activities. The AR proposition is well established across the financial services industry. Those firms that currently act as ARs for their mortgage business should also be able to do so for related consumer credit activities.
“We are concerned that AR firms that currently hold a consumer credit licence will be required to enter the interim permission regime, even though they may be unlikely to become fully authorised, as they are instead able to become ARs for their consumer credit activities.
“The FCA has provided greater clarity on its proposals for the regulation of consumer credit. However, AMI’s long held view is that the dual regulation of mortgage brokers, resulting from the FCA’s regulation and the OFT’s CCL regime, has created an unnecessary regulatory burden on firms.
“The regulatory transfer process is an ideal time for FCA to tidy up this unnecessary duplication of rules by removing the consumer credit requirements from firms that already hold a mortgage permission.”