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Payday Loans News – Consumer Credit Oversight May Be Assumed By CPMA

by Jim ONeil on January 10, 2011

in Payday Loans News

The UK Treasury has proposed that consumer credit regulation be transferred to the newly established Consumer Protection and Markets Authority (CPMA) from the Office of Fair Trading (OFT). This move was suggested in order to ease confusion due to these items being regulated by both the OFT and the Financial Services Authority (FSA).

According to the 60-page consultation document prepared by the Treasury, nearly £131 billion in unsecured credit was lent during the first nine months of 2010. The consultation reported that dual oversight of consumer credit by the OFT and FSA may be confusing to customers. Retail finance, overdrafts, payday loans, check cashing, pawnbroking, unsecured personal loans, home credit, and credit cards all fall under dual regulation.

Treasury Financial Secretary Mark Hoban reported that the UK government is already beginning to fulfill its commitment regarding the reformation of financial regulation. The moves are designed to avoid repeating mistakes made during the recent financial crisis. He believes that now is the opportune time to bring OFT consumer credit regulation under the CPMA.

This change will create one regulator for all retail financial services, thus one point of contact for consumers and business. According to Mr. Hoban, the Treasury is aware that this suggested reform is wide-

reaching and complex. It knows that any new leadership must be flexible and able to accommodate the diverse areas included within the consumer credit sector. The leadership also must have enough staff to handle the various areas that will fall under CPMA leadership, if the suggestion is approved.

Mr. Hoban believes that bringing consumer credit under the ruling of CPMA reflects both business and customer needs. The Treasury is committed to continued consultation and involvement regarding the issue. A response closing date of March 22 has been established, after which time a decision will be made.

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