The Financial Conduct Authority (FCA) has clarified an issue that many motor dealers were highlighting as an area of concern with regard to the required categories on a consumer credit licence.
The area being discussed is Category G on the licence, which relates to debt administration. There has been some debate as to whether this category is required by a motor dealer, especially with regard to the new credit-related activity of ‘operating an electronic system in relation to lending’. There had been conflicting opinion as to whether submitting finance proposals through an electronic system would mean a dealer would have to apply for this additional category. The FCA has now confirmed that Category G is only intended to apply to ‘peer-to-peer’ lending. It is NOT intended to apply to motor dealers and their relationships with their lenders and brokers. This welcome clarification ensures that motor dealers will not need to apply for this category on their consumer credit licence.
Stephen Sklaroff, Director General of the FLA has just stated that “As agreed with the government, firms who use electronic platforms that do not operate in the peer-to-peer lending market, will not require Category G permissions.”
Clearer picture of consumer credit
