Dealers are being urged to ensure they are prepared to respond quickly to the "imminent" publication of the Financial Conduct Authority’s (FCA) policy statement on proposed changes to consumer credit regulations.
The first consultation paper on proposed changes to regulations was published in March 2013; the second consultation with draft rules is due late September. The final rules are due in March with regulations applied from April 1.
Andy Gruber, director of multi-marque F&I provider Alphera, said: “While there is potentially a significant amount of administrational burden for dealers in the short term, this tightening of consumer credit rules is a good thing for the industry, which already has a pretty good reputation where lending and credit are concerned.
"Remember, the FCA is a new regulatory body and considerably more pro-active than the OFT. Given the recent fines levied on Swinton Insurance and mobile phone insurance intermediary Policy Administration Services for £7.4 million and £2.8m respectively, it means business. While major dealer groups have legal departments to ensure adherence to the new regime, it’s the smaller dealers that need help to understand the new rules.
“The challenge at the moment is that it is relatively vague what the exact requirements are. A strong link between lenders and brokers and dealers is going to be essential in preparing for this change.”
Later this year, Alphera will be holding workshops to facilitate discussion among key brokers, legal experts, financial advisory bodies and dealer customers.
"Our initial recommendation is that all dealers or partners who sell finance should check the details held by the OFT in respect of their credit license to ensure that records are up to date and that they have all required licences. We don’t know yet what the exact regulations will require, but one thing is sure: a lot of things will have to be dealt with before the FCA launch on April 1.”