The Financial Services Consumer Panel (FSCP) has called for the new Financial Conduct Authority (FCA) to be given full responsibility for the regulation of retail financial services, including consumer credit.
This is in advance of the publication of the Treasury and the Department for Business and Skills’ findings from their consultation on how consumer credit should be regulated.
The FCA will take over from the FSA once the anticipated Financial Services Bill is enacted. The FSCP believes that consumer credit regulation should be transferred from the Office of Fair Trading (OFT) to the FCA.
The FSCP said that preserving existing consumer protection mechanisms must be the overriding priority for the reform of credit regulation. The Panel believes that a two stage process is necessary starting with the FCA taking over responsibility for regulating credit under the Consumer Credit Act (CCA). A subsequent review would examine when it would be appropriate to move to an integrated Financial Services and Markets Act-based regime, it said.
Adam Phillips, chair of the Consumer Panel, said: “The Panel is calling for a common sense reform that will enhance consumer protection. Transferring the Consumer Credit Act powers to the FCA will make retail financial services regulation work in the way most people expect. Consumers would be surprised to learn that the FSA regulates the notification of an unauthorised overdraft and the grounds on which payments may be bounced but not the overdraft itself