Do I really need those licence categories

I have had a fair bit of feedback from firms about their CCL and a number of thoughts that I think would be useful to share.

As the rules currently stand I think that it would be extremely difficult for a firm to operate within the mortgage and indeed the insurance markets without a CCL. There are a few points here.

Although mortgages are outside the scope of the CCA, any discussion around mortgages will invariably result in a discussion around pre-existing loans whether consumer credit or not. Some of that discussion may  well result in the client consolidating CCA loans within a mortgage. Given that almost all regulated mortgages will be  advised, this means that de facto, a firm will have recommended a course of action that includes the repayment of CCA loans. This is highly likely to involve activity that falls within licence category D or E.

Any mortgage product that involves a credit card or unsecured credit as a factor or term of the mortgage conditions is probably going to result in the client taking out unsecured credit that falls under the scope of the CCA. This means that , given that most mortgage sales are advised, firms will invariably be recommending a course of action that involves a client taking CCA credit and thus falls within licence category C. Equally, monthly payment of insurance premiums involves CCA regulated credit and category C is probably required if you are going to recommend such action to a client ( and technically even if you are just selling the insurance to them - it is probably brokerage in the CCA definition of the term.

If you need to be  able to discuss existing debts with a clients creditors - and I know that this certainly occurred in the past albeit perhaps now to a lesser extent - then you certainly need D and probably E.

If you want to be  able to obtain credit details on behalf of a client or to advise them on action to take regarding credit entries with Credit Reference Agencies then you are going to need category H1.

With all these points, I would suggest that as a normal broker you are likely to need the C,D, E and H1 as a probably minimum under the current rules and projecting forward to the interim regime. Hopefully, with all credit under the FCA banner, there will be  an opportunity to rationalise the whole matter but that is going to take a while.

I hope that helps a little, but please feel free to contact me directly on david.c.payne1@btinternet.com if you wish to discuss your own specific circumstacnes

Consumer Credit Update

This post is just to let you know that there has been more activity on the CCL front. Firstly, the FCA have confirmed that for Sole Traders the cost of interim registration for CCL activities is £150 and for other firms it is £350. This is a one-off payment due at the time that you apply for interim permission.

The second point is that you will be  able to apply for interim permission from 1st September 2013. The FCA will write to you, according to their web site, when the interim permission system opens to explain what you have  to do and how to remain compliant. In other words this system will be  available from September but not necessarily from the 1st.

The  third point is that if you have not already done so, you should check your Consumer Credit Entry on the CCL register.

You will need to check the following: -

1. Name, 
2. Address, 
3. Company Details and 
4. that the licence covers the activities you want to continue after 1st April 2014.

If any of these details are incorrect you will need to change them before you apply for interim permissions with the FCA.

That last post was too long

Ok, that last post was a bit long so here is a shorter version:-

You need to be  checking your CCL records on the CCL site to make sure you are correctly registered before the transfer to the FCA on 1st April 2014.

As well as your basic detsails, you need to make sure that you have the correct licence categories.

If you are a 'normal' mortgage broker doing 'normal' mortgage business then you should check to see if you have the following categories:-

• Category C Credit brokerage
• Category D debt adjusting
• Category E debt counselling
• Category H Credit information services)
• Category H1  (Credit information services - including credit repair)
• Canvassing off trade premises

You don't necessarily need all these - it will depend on what you do and what you want to be  able to do.

For category D & E you will need to submit a Credit Competence Form with your request and the fee (£80 to the OFT for any changes to the categories of licence , I  believe).

A sample of the Credit Competence Form can be seen here :-

http://oft.gov.uk/shared_oft/business_leaflets/credit_licences/CCF.pdf

The next post will explain how to make any changes to your CCL.