FCA - Regulated fees and Levies: Policy Proposals for 2018-19
Response to the consultation
Q13: Do you have any comments on our proposed amendments to the methodology collecting the Money Advice Service debt advice levy from 2018/19
We wish to express our full support for the proposal to recover the debt advice levy directly from a new consumer credit lending class (CC3). ABCUL has consistently argued that consumer credit firms should directly contribute towards the debt advice levy under a ‘polluter pays’ model but accepts that this has not been possible due to previously insufficient data on their lending. We therefore welcome that the FCA is now in a position to more precisely raise these levies from the appropriate fee-blocks.
We also fully support and appreciate concession on debt advice levies which would apply to the first £2 million of consumer credit lending for those credit unions which engage in relevant consumer credit activities. The proposed concession would result in a greater likelihood of credit unions – which already operate within the tightest of margins in serving the financially excluded under a uniquely low interest rate cap – entering and providing competition in the consumer credit market due to the reduced barrier of regulatory fees.
Q12: Do you have any comments on whether we should in future charge firms which choose not to take advantage of online invoicing
ABCUL welcomes the option and efficiency of online invoicing and generally agrees with the benefits outlined in the consultation. We also believe that the majority of credit unions are likely to be able to transition to online invoicing with reasonable ease. However, a minority of credit unions which find it more difficult to adapt their processes have benefitted from a number of exemptions from electronic reporting, such as is currently the case for the Senior Managers Regime and was previously the case in submitting returns to the PRA.
Whilst we do not expect the number of credit unions to continue with paper-invoices to be high, we do have some concerns that these credit unions which are likely to be small and resource limited may be subject to disproportionately high fees for receiving paper invoices. These fees are already significant for a small credit union and as currently proposed could increase significantly year on year as the number of firms using paper invoicing dwindles. We propose that a suitable cap should be introduced so that small credit unions, which may be some of the last firms to make the transition to online invoicing are not left behind paying excessive costs for a paper invoicing process not originally intended to serve such a small number of firms.
We would be delighted to provide any further information should you require it and to meet to discuss the matters raised in this submission in more detail.
The PDF version of this response is available to download on the right-hand side.