"Full" or "Limited" Permission?

There are two types of FCA authorisation. A consumer credit firm must choose whether to apply to the FCA for a “Full” or a “Limited” permission.

The type of authorisation that a firm should apply for is determined by the type of activities it carries out. The table below explains which activities fall into each category:

 

 

Activities requiring a Limited Permission

Consumer credit lending (where the main business is selling goods and non-financial services, and there is no interest or charges) – this excludes hire-purchase and conditional sale.

Consumer hire

Credit broking (where the main business is selling goods or non-financial services and broking is a secondary activity and is not carried on in the consumer's home)
Credit broking in relation to the “Green Deal”.
Not-for-profit debt counselling and debt adjusting.
Not-for-profit credit information services.
Local authorities (lending within the scope of the Consumer Credit Directive). 

 

 

Activities requiring a Full Permission
Consumer credit lending (including personal loans, credit card lending, overdrafts, pawnbroking, hire-purchase, conditional sale, etc).

Credit broking (including introducing consumers to lenders as a main business activity).

Debt adjusting.

Debt counselling. 

Debt collection.
Debt administration.
Providing credit information services.
Providing credit reference agency services.
Peer to peer lending. 

 

Motor finance providers will require a Full Permission from the FCA as consumer credit lending is deemed a higher-risk activity (i.e. there is a greater potential risk of consumer detriment). Firms applying for a Full Permission are required to comply with all of the FCA's consumer credit rules (see ‘The FCA and principles-based regulation' module), have greater FCA reporting requirements, higher annual authorisation fees and more stringent Threshold Conditions and Approved Person requirements.

Motor dealers can apply to the FCA for a Limited Permission for their consumer credit activities, as credit is provided by dealers as a secondary activity as dealer's primary activity is selling cars. There are less onerous regulatory requirements for firms holding a Limited Permission. However, a motor dealer (or any other type for firm) cannot hold a Limited Permission for consumer credit if it is directly authorised with the FCA for general insurance. A dealer must either apply for a Full Permission for consumer credit (to maintain direct authorisation for general insurance) or the firm must act as an Appointed Representative (AR) for general insurance if it wishes to apply for a Limited Permission.