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FCA - Regulated fees and Levies: Policy Proposals for 2019-20

Response to consultation

Overall we are supportive of the proposals outlined in this year’s fees policy consultation. In particular, we welcome the proposal to exempt credit unions from paying consumer credit fees which will encourage credit unions to consider becoming affordable alternatives in markets such as the rent-to-own market which recently saw regulatory intervention whilst streamlining the FCA’s administrative process.

We also welcome the removal of charges for inspecting the public register except where a member requests a personal visit to the FCA offices. The removal of these fees should improve transparency for mutual societies through allowing members and third-parties to access the information they require without cost. It is right that this should not extend to personal visits providing that the information is available in electronic form and we accept the FCA’s rationale for increasing the fees for those wishing to visit the FCA’s offices.

Maintaining the mutual societies register

As authorised firms, variable fee-paying credit unions would be in the minority of mutual societies which would be required to absorb the costs of this proposal. Whilst those contributing credit unions would have at least £10 million modified eligible liabilities the entire credit union sector is a fraction of the size of the largest retail mutual societies. Additionally, as the minimum fees are now linked with the FCA’s annual funding requirement these costs may ultimately filter through to even smallest credit unions (those under £500k MELs).

We agree that the costs of the smallest mutual societies should be absorbed by FCA fee payers in order to increase the efficiency of invoicing and debt collection whilst reducing the burden on what are often small, voluntarily-run mutual societies. However, we would prefer that the FCA give greater thought to whether it might ask the largest mutual societies to contribute a reasonable fee to the costs of maintaining the mutual societies register given their scale and ability to pay.

Whilst such as system may not fully address the concerns that the FCA has with processing paper returns, we believe the FCA should encourage rather than require all mutual societies to submit electronic returns. This could be done through better provision of electronic reporting systems, for instance.  Not only could this reduce the costs of manual processing for the purposes of fee setting and invoicing but would also reduce the costs of providing the transparency benefits of the mutual societies’ register which may see increased activity due to the proposed reduction of fees for electronic inspection of the register.