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Consumer credit authorisation – new NHF guidance released

Consumer credit authorisation – new NHF guidance released

Real Estate partner Suzanne Benson has been working closely with the National Housing Federation and Malcolm Waters QC of Radcliffe Chambers to prepare guidance for the housing sector on applying to the FCA for consumer credit authorisation.  Following the transfer of consumer credit regulation to the FCA in April, this is a key issue for registered providers who are now required to assess their long term requirements for authorisation.

What's happening?

Housing associations undertake a number of activities which potentially require FCA authorisation, such as providing loans, offering debt advice and negotiating and collecting third-party debt.  In April, the FCA assumed control of consumer credit regulation from the OFT and now many organisations are being allocated three month windows during which to apply to the FCA for authorisation to continue participating in regulated activities.

Government policy has led to the change in regulator from the OFT to the FCA, who take a more rigorous and detailed approach. Organisations who previously held Consumer Credit licences with the OFT are now facing the challenge of interpreting the new regulated activities and getting to grips with FCA requirements. This is a particular issue for the housing sector who do not fit the norm for more mainstream credit providers but nonetheless frequently participate in regulated activities.

What do RPs need to do?  

Following the change in regulation, new and updated guidance for housing associations has been published today on the NHF's website.  RPs should review this guidance carefully and assess the requirements of the new regime.  They should also carry out an audit of their organisation (or group) activities to establish both the level and detail of any authorisation required.

If RPs have any doubts or queries about their obligations, they should seek advice so as not to fall foul of the law and risk committing a criminal activity.

Guidance on Consumer Credit Authorisation can be downloaded here.