Car finance provider Alphera Financial Services has urged motor retailers to organise themselves in response to the Consultation Paper (CP) published in March regarding the transfer of consumer credit regulation to the Financial Conduct Authority (FCA) on 1 April 2014.
At the time of its publication, Stephen Sklaroff, director general of the Finance & Leasing Association (FLA), advised "anybody involved in the credit market in any capacity" to read the CP. "This is big and happening very soon," he said.
The period for initial responses to the paper ended at the start of May and a final policy statement is expected in September. Despite concerns aired by the Finance & Leasing Association over whether enough time would be allowed for a "smooth" transfer and not restrict credit, the FCA said in May it was "confident" in the timetable for change and reiterated it had been "engaging with firms and industry groups right the way through the transition".
Anticipating the narrow deadlines within the transfer, Alphera has advised each of its partner companies which sell finance to check their credit license details currently held by the Office of Fair Trading, the present regulator of consumer credit, and ensure they are correct ahead of April.
Workshops and timetables
Alphera, which is owned by the BMW Group and provides loans on all marques except BMW, will be hosting a series of workshops with its partners, such as dealers, brokers and legal experts, to discuss any initial draft of rules under the FCA.
Andy Gruber, director of Alphera, explained: "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.
"Inaction and lack of communication are the big dangers to dealers facing this regime change over the next few months and we’re certainly talking a lot more often to our retail and broker partners about the looming FCA changes."
Gruber echoed the concern expressed by Sklaroff, over the tight time frame for motor finance companies – including dealers and brokers – to be processed under the interim permission scheme.
"This tougher regulatory regime is due to be introduced by 1 April 2014," said Gruber, "but is no joke for hard-pressed dealers who have little time to ensure they are operating within the new regulatory requirements."
As Gruber told Motor Finance last month, by the time the latest rules are digested, "the launch of the new regime will only be six months away, which doesn’t leave a lot of time to prepare.
"We want to see what will be published in September and then we’ll push this topic hard to support our dealers in Q4." However, Gruber saw positives in the change of regulator: "While there is potentially a significant amount of administrative burden for dealers in the short term," he said, "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.