FSA Regulated Broker Limit ?

Sprightlyone

If a broker is regulated by the FSA and on the FSA website it states that the broker is LIMITED to Regulated Loans, does this mean for older loans that they were ONLY allowed to broker loans up to £25,000 before the new regulations came in which abolished the ceiling?

What I am asking is would a broker be allowed to arrange a loan for say £50,000 and what would the consequences be if they did and were not allowed to?

Thanks

S1

Sprightlyone

Sprightlyone wrote: »

If a broker is regulated by the FSA and on the FSA website it states that the broker is LIMITED to Regulated Loans, does this mean for older loans that they were ONLY allowed to broker loans up to £25,000 before the new regulations came in which abolished the ceiling?

What I am asking is would a broker be allowed to arrange a loan for say £50,000 and what would the consequences be if they did and were not allowed to?

Thanks

S1

bump bump bump

Rafter

S1,

Very specific request... and I'm not qualified to give you a legal opinion.... but.....

Are you sure the broker was regulated at the time the loan was taken out?

Have the FSA rules changed since the loan was taken out?

A broker could be fined or have their credit license revoked if they are breaching FSA rules.

As a borrower though, if you have entered into a large non-regulated credit agreement and the contract is valid (ie no unfair contract terms and signed by both parties) then trying to get loan written off because of a broker infringement is unlikely.

Remeber the broker is just an intermediary/ sales person - the ultimate credit agreement is between the borrower and lender?

R.

~Brock~

Sprightlyone wrote: »

If a broker is regulated by the FSA and on the FSA website it states that the broker is LIMITED to Regulated Loans, does this mean for older loans that they were ONLY allowed to broker loans up to £25,000 before the new regulations came in which abolished the ceiling?

What I am asking is would a broker be allowed to arrange a loan for say £50,000 and what would the consequences be if they did and were not allowed to?

Thanks

S1

Your post is confusing because the only lending that the FSA regulates is First Mortgage lending.

There is no requirement for a broker to be authorised by the FSA if they are not involved in first mortgages, unless they are also involved in another regulated activity such as General Insurance or Investments, in which case they would need to be authorised under those categories.

You shouldn't confuse the idea of regulated or un-regulated consumer credit agreements as being anything to do with the FSA.

If the broker is involved in Consumer Credit Agreements then they are required to hold the appropriate categories of Consumer Credit Licence, but these are issued by the OFT and not the FSA.

payless

think you (OP) are confusing the terms "regulated mortgage" and "regulated loan"

The term used by FSA " advising on regulated mortgage contracts"
which would be first charge residential lending.

LOANS- 2nd charge , B2L, commercial & unsecured will come under OFT consumer credit licence OR be exempt.

Sprightlyone

You are all dead right, I am confusing the issue, shows my lack of knowledge.. and I thank you for being frank...this is what I am looking to find out..

If a 'loan' company are asked to lend money to a consumer under £25,000 say in 2006 that would be a ' regulated ' loan ( regulated by the Consumer Credit Act?.) but Licensed I guess by the OFT?

If they were asked to lend on a secured loan of say £50,000 ( I'm talking older loans) then that would be an 'Unregulated' CCA loan so the consumer is not covered by the protection of the CCA (under most circumstances ie: It's not a multiple agreement or some such quirk).

So, who would a lender be licensed by and what or who regulates their activities on these higher loans and if we went to the FSA, or OFT for license checking and it says they are only licensed to carry out regulated business would taht restrict their activities?

Someone above mentions unless they are 'exempt' when would that apply and for what kind of lending?

I'm trying to establish if a lender who gives large loans needs to be licensed and if so who licenses and regulates them? One lender for example says they are FLA (Leasing?) regulated/licensed...but a loan is not a lease is it?

Sorry if this sounds confusing, but it is quite important to establish who licenses and regulates who in relation to Loans of all kinds although you have explained the mortgages and I thank you for that.

~Brock~

If a company is in the busienss of lending money it needs to have a CCL. This is irrespective of whether the individual loan agreement(s) are regulated or unregulated.

Whether the agreement is regulated / unregulated determines whether the borrower has the protection of the Consumer Credit Act - it does not affect the licencing requirement of the provider - all must be licenced in the same way by the OFT

The FLA is a trade body that represents the interests of its members. It is not a regulatory body and does not issue licences to trade.

None of the above is anything to do with the FSA.