In 2015 LawWorks published a briefing about the FCA's new regime for the regulation of consumer credit and debt advice.
LawWorks made a number of submissions to the FCA illustrating the impact of these changes on pro bono services and requested that a waiver be granted to cover pro bono consumer credit and debt advice. The FCA replied that there was no scope for them to grant a waiver from authorisation requirements, and that LawWorks might raise the issue with the responsible Government Department (HM Treasury) directly.
As a result of the changes, LawWorks guidance has provided information for all clinics not otherwise covered by FCA limited permission authorisation on the regulatory risks and prohibitions on advising in all areas of consumer credit and debt from the 1 April 2014.
The case for change
After seeking legal advice on various options, in 2017 LawWorks wrote to Ministers suggesting that the Financial Guidance and Claims Bill would be an appropriate legislative vehicle for making a small change to enable Clinics in the LawWorks network to come within the specific arrangements for not for profit bodies that had been enacted in the 2014 secondary legislation. We argued that it was likely that the policy intention all along was that free advice services in the non-profit sector, including pro bono clinics, should benefit from bespoke arrangements for non profit bodies, so the omission of clinics may have been a drafting oversight.
You can download the letter and detailed briefing below.
LawWorks also worked with members of the House of Commons Bill Committee scrutinising this new legislation covering the arrangements for providing money guidance and debt advice to the public, to get an amendment debated on the application of FCA regulation to pro bono legal advice clinics.
The Financial Guidance and Claims Bill is a piece of wide ranging legislation creating a new architecture (through a new public body - the Single Financial Guidance Body) for education, guidance and advice to consumers on personal finance, money, debt and pensions matters. The new body's responsibilities include advising Ministers on relevant policy and regulatory matters, and the Bill also widens the FCA's regulatory remit. The amendment requires the new body to address the concerns raised by the regulatory restriction on pro bono clinics providing debt advice.
You can download our briefings to the Bill Committee below.