FSA Regulated Fees & Levies - 2012/13
- We welcome the FSA’s commitment to retaining the exception to the standard minimum fee for smaller credit unions at £160 for those with Modified Eligible Liabilities (MELs) of less than £500,000 and of £540 for those with MELs of between £500,000 and £2 million. This approach reflects both the need for proportionate treatment of credit unions as relatively small entities and recognises the social value that credit unions engender through their work to extend access to financial services for those that otherwise might not have access and through which it is possible for them to improve their financial position. This value is recognised across Government and we are grateful that the FSA also recognises it in their fees policy.
- We also support the continued application of 25% and 65% premiums for the second-largest and largest firms in the A.1 deposit-taking class. These firms are the most systemically-important firms under FSA regulation. In light of the impact of the financial crisis and the effect that this has had upon the FSA’s regulatory focus – i.e. an increased dedication of resource and strategic focus upon those firms of systemic importance; that are “too big to fail” – it is right that the reformed and refocused regime should be reflected in the FSA’s fees policy. Even the very largest credit unions are of a scale and simplicity that their failure would not threaten the integrity of the financial system and therefore could be allowed to default in an orderly fashion.
- Though we realise that the Financial Services Compensation Scheme element of the consultation has closed, we would like to express our keenness to resolve the outstanding issue of reforming the funding regime for the Scheme. We look forward to the publication of a full consultation on the future fee structure for the Scheme.
- We are slightly concerned about the near-doubling of the Money Advice Service (MAS) levy with the introduction of a second element for the co-ordination of debt advice services though we support the split of 85% to 15% between mortgage lenders and deposit-takers. When the Consumer Financial Education Body (the forerunner to MAS) was originally proposed, it was suggested that those firms which are regulated under the Office of Fair Trading (OFT) for consumer credit activity should pay a contribution in addition to that paid by FSA-regulated firms and the power was taken in the Financial Services Act 2010 to enforce this . However, we understand that difficulties were discovered when assessing the feasibility of raising some of the MAS funding from OFT-regulated firms since they do not report their levels of activity, only that they are active. Nevertheless, given the role that OFT-regulated lenders, such as high-cost lenders, play in exacerbating the problems that MAS’ new responsibility seeks to address we think it is only fair that they should pay a contribution. We hope that when, under the proposed new regulatory structure, consumer credit regulation comes under the Financial Conduct Authority this question is looked at once more to ascertain whether a fair contribution cannot be raised from consumer credit lenders.
The full response is available to download on the right.