Solicitors should be able to carry out certain consumer credit activities under SRA authorisation as long as their activities are central to the legal services they provide, the SRA Board has agreed.
The Board approved the move at its meeting yesterday (Wednesday 9 September). It will ensure that firms do not also have to be regulated by the Financial Conduct Authority (FCA) and are not over-burdened with significant additional rules for consumer credit, and that their client protections remain in place.
Crispin Passmore, SRA Executive Director for Policy, said: “This is a positive step forward. Everyone at the SRA and Financial Conduct Authority has worked exceptionally hard to ensure that the proposals offer a balanced and proportionate approach to regulation for firms following the transfer of responsibility for regulating consumer credit from the Office of Fair Trading to the FCA.”
The SRA has been working with the FCA for over a year on the best way to approach its regulation of solicitors providing consumer credit 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.
SRA guidance on carrying out consumer credit activities is set to be published in the autumn. Firms will need to read the guidance, in addition to new rules, when carrying out consumer credit work.
The SRA consulted on its proposals for consumer credit regulation between 26 June and 7 August 2015. The consultation can be viewed here: https://www.sra.org.uk/sra/consultations/consumer-credit-activities-sra-arrangements.page.
The consumer credit approach will need to be approved by both the FCA and the Legal Services Board. If agreed, changes to the SRA Handbook will come into effect on 1 April 2016.