A few years ago, in the early days of micro-credit in the United Kingdom, this market is very poorly regulated, but then there are new oversight bodies and agencies, which could greatly improve the situation. Consider the number of such organizations and their history.
Office of Financial Regulation (FSA)
This organization is involved in the management of financial activities in the UK between 2001 and 2013. FSA was independent of the state and funded by companies that are regulated.
FSA (Financial Services Authority) first earned in 1985, but then it was called differently: the Council for Securities and Investment (The Securities and Investment Board Ltd.). In 1990, the organization was involved in a number of scandals, after which it was decided to create on its basis a universal body, which will deal with the regulation of the entire financial sector as a whole, not just one part.
As a result, in 1997 there was an organization called the FSA. In 2001, a new law "On the Financial Services and Markets" gave her a new oversight and regulation of the futures and stocks than ever before by other organizations - the Office of the Securities and Futures (Securities and Futures Authority, SFA).
FSA also regulate the activities of insurance companies, banks, mortgage and financial advisers. All this was before the advent of microfinance institutions that have started to develop rapidly only in the last five years.
In 2007 the recession began, which led to a weakening of the entire British economy. State, it was decided to review the work of supervisory agencies, leaving in April 2013. FSA functions moved to a new body - the Office for monitoring compliance with the code of conduct in the financial sector.
Management control compliance behavior in the financial sector (FCA)
FCA (Financial Conduct Authority) regulates the activities of financial institutions with an emphasis on standards of conduct. Its ultimate goal is to protect the interests of consumers. It FCA regulates the activity of microcredit organizations that provide so-called "loans to payday," as they are called in England. The head of the agency Martin Wheatley (Martin Wheatley), who had headed the Commission on Securities and Futures Commission in Hong Kong.
In December 2012 the creation of FCA was approved by royal decree, and in April the following year FSA was abolished. The Bank of England became directly responsible for the financial stability of all the British economy. FCA began to work closely with the other two agencies - the Financial Policy Committee of the Bank of England and the Office of prudential regulation.
FCA regulates various financial markets, including the microcredit market. This body controls the marketing of financial products, according to the standards and restrictions, formulates rules of work and protect consumers.
British microfinance organizations have often been at the center of scandals. For example, widely discussed methods of television advertising such services. It was noted that when children watch such advertisements, they begin to require parents to take credit for their own vile purposes. The competence of the FCA - to decide whether to prohibit such advertising, in principle, or somehow adjusted.
Another important function of the FCA - establishing quality standards for the proposed financial products. In this respect, one of the best and most recent example is the microfinance industry is that subjected to strict regulation by the FCA. It was set maximum interest rates and the size of loans, taking into account the interests of borrowers. Regulator seeks to prevent excessive zakreditovannost borrowers and the emergence of the astronomical prices and rates.
FCA has the right to investigate the activities of financial companies to set performance standards and then require them to perform. FCA may prohibit a particular financial product or advertising in the event of a breach of the rules. This led to the fact that many market players have left the microfinance business, but the market thus became healthier and better.
Financial Policy Committee (FPC)
Next supervisor that we will look at is called the Committee on Financial Policies (Financial Policy Committee), and it is actually a part of the Bank of England. This Office is responsible for monitoring the macro- and micro-economic factors, and the identification of potential threats to the country's economy.
Earlier, similar functions performed FSA, but this body was abolished in 2012. After the reform of financial regulation to replace the FSA received several departments with more specific tasks, primarily FCA. As for the FPC, then the organization is engaged in identifying economic threats reported by the Office of prudential regulation (PRA), which, in turn, take the necessary steps.
Office of prudential regulation (PRA)
FPC is not the only regulator formed by the closure of FSA. At the same time it was established the Office for the prudential regulation (Prudential Regulation Authority, PRA), responsible for the regulation, monitoring and setting standards in the financial industry. PRA is also part of the Bank of England, his goal - the enforcement of standards by financial institutions. PRA ensures that market players and their customers have been protected against fraudulent practices, especially in the insurance market.
We can say that PRA ensures that the UK economy remained healthy, stable and growing, it is only in such an economy, consumers can receive high-quality financial services at fair terms. Office examines the activities and working methods of the financial institutions, evaluates the existing and potential risks and, if necessary, intervene in the situation. PRA is particularly interested in the company and the factors that threaten economic and financial stability of the country.
PRA is working closely with the FCA, which recently introduced a new, more stringent regulations microcredit market.
Consumer Credit Association
Consumer Credit Association (Consumer Credit Association, CCTA) - one of the oldest trade organizations credit the UK. It monitors the fairness of laws and represents the interests of its members in negotiations with lawmakers and other public bodies. Its purpose - to prevent the harmful effects of new laws, because of the collapse of which could come this or that industry.
Stepchange - a charity helping the unlucky consumers who assumed back-breaking loans. In fact, it protects the interests of borrowers and engaged in informing and advising consumers on credit.
Stepchange borrowers explains complex issues and the various pitfalls of credit, potential difficulties in case of redemption, helps in restructuring the debt, etc. Consultations Stepchange free for borrowers. The most important task of the organization is improving the financial literacy of society and the elimination of frivolous habit of taking loans.
Stepchange offers the following services:
- Develop a plan of debt repayment, which will at the same time realistic and affordable;
- debt restructuring in such a way that the first 5-6 years of the debtor pays the debt at a reduced rate;
- poor borrowers whose debt exceeds 15 thousand. pounds, can get from Stepchange order to write off the debt;
- Free consultation on mortgage lending.