New proposals for the regulation of solicitors doing consumer credit work have been drawn up by the Solicitors Regulation Authority (SRA).
The proposals would enable solicitors to carry out certain consumer credit activities as long as they are central to the legal services they provide. They would also ensure that law firms are not over-burdened with additional rules, and that client protections remain in place.
The SRA has been working with the Financial Conduct Authority (FCA) over the last 12 months to identify the best way to approach its regulation of solicitors providing these services. This follows the transfer of the responsibility for regulating consumer credit work from the Office of Fair Trading to the FCA on 1 April 2014.
Crispin Passmore, SRA Executive Director for Policy, said: “Our discussions with the FCA have produced a set of proposals that will ensure regulation is balanced. The proposals would focus regulation on the substantive activities undertaken by solicitors, in a way that would not be overly burdensome.”
The SRA is consulting on its new proposals until 6 August and is keen to have feedback from across the sector. Following the consultation, final recommendations on the regulatory approach are expected to be presented to the SRA Board at its meeting in September.
SRA-authorised firms that mainly carry out consumer credit activities already require FCA regulation. The changes mean firms may now also require authorisation by the FCA if they undertake prohibited activities that are not considered central to their legal services practice.
These activities are listed in the SRA consultation document. The consultation is available on the SRA’s website here:
The SRA will also produce specific guidance around consumer credit work, and will hold a webinar to give those affected the opportunity to hear current thinking and pose questions directly to the SRA. Further information on the webinar is here: