FCA/APCC Liaison Meeting 10 December

Agenda Consumer credit (Nick Mears, Kim Heffernan & Sunil Thakar) 1.00Lunch & general discussion (Lucy McClements, Val Smith, Gillian Lavabre, Andy Freeman & Emma Krygier) 1.30MCD (as for lunch, plus Beverley Brewster) 2.00Average determination times/AOB (Lucy McClements, Val Smith, Gillian Lavabre, Andy Freeman & Emma Krygier) 2.30Close

Consumer Credit Nick Mears, Kim Heffernan & Sunil Thakar 3

Lunch & general discussion Lucy McClements, Val Smith, Gillian Lavabre, Andy Freeman & Emma Krygier 4

Mortgage Credit Directive & Second charge lending - authorisation Beverley Brewster 5

Mortgage Credit Directive - General information on authorisation process We expect to be open to accept applications from second charge firms applying for mortgage permissions in March/April 2015 Timing is tight: Directive comes into force on 21 March 2016 Standard statutory timetable applies so we have six months to make a decision on complete applications and 12 months to make a decision on incomplete applications. Typically most lender applications are incomplete The more accurate and complete an application is, the quicker it can be assessed Firms should refer to the existing application form supplements for home finance brokers and home finance providers/administrators for the information and policies and procedures that will be required to be submitted with their application. Single set of mortgage permissions means there will be a common assessment process for first and second charge firms Firms should look at the consultation paper and MCOB and start thinking about the gaps in their business now; this will help firms to fully complete their application We will not authorise firms on a ‘just in case’ basis. Firms should only apply if they are actively involved in the second charge market Application fees for mortgage permissions are, in most cases, higher than those for consumer credit. See the fees consultation paper published last month. Firms can use the fees calculator on our website Consumer Buy to Let is running on a different timeframe. Look out for HMT and FCA consultations early next year. 6

Mortgage Credit Directive - What do firms need to do? Existing authorised firms with first charge mortgage permissions Firms with first charge mortgage permissions and doing 2C business in the same legal entity will not need to apply for additional permissions as the existing mortgage definitions will be extended to include second charge BUT, firms registered for consumer credit interim permission and whose only consumer credit business relates to second charge business should to request to move their application period to March 2016 to avoid having to make a consumer credit application. This way firms will keep interim permission until the MCD comes into 7

Mortgage Credit Directive - What do firms need to do (ctd)? Consumer credit firms doing second charge and other credit activities – application period ending March 2015 or earlier Firms should apply during their agreed application period unless they are contacted to move the date If the consumer credit application is determined before we are open to accept applications to add mortgage permissions firms will need to apply to vary their permissions to add mortgage permissions. There will be a fee to pay. If the application is not determined, firms will be able to complete a supplementary form and pay any top up fee due – we will confirm the process early next year. 8

Mortgage Credit Directive - What do firms need to do (ctd)? Consumer credit firms doing second charge and other credit activities – application period April 2015 onwards Firms should consider applying before their agreed application period for both credit and mortgage permissions – firms are allowed to do this if they are adding non-credit permissions An early application will increase the likelihood of application being determined by March

Mortgage Credit Directive - What do firms need to do (ctd)? Consumer credit firms only doing second charge business Firms whose only consumer credit business relates to second charge business will need to apply for mortgage permissions, not credit permissions. Firms should complete the financial services application form for home finance brokers or home finance providers/administrators and not the consumer credit form. But firms cannot apply until we are open to accept applications. Firms should to request to move their application period to March 2016 to avoid having to make a consumer credit application and to keep their interim permission until the MCD comes into force on 21 March 10

FCA Information and Engagement We understand that firms want information and certainty. We are continuing to work through the issues and we will keep firms informed via the following channels: Website - monitor for ongoing information Regulation Round up and other FCA publications Considering authorisation workshop or webinar specific to authorisation process Engagement with compliance consultants and trade bodies Remember, firms can also use the Contact Centre for questions 11

Questions 12

Average determination times & AOB Lucy McClements, Val Smith, Gillian Lavabre, Andy Freeman & Emma Krygier 13