The Financial Conduct Authority (FCA) has published a consultation paper on proposed changes to the way it levies fees, including how much firms will be charged to be authorised to offer consumer credit services.

The FCA is proposing that firms applying for 'limited' permissions to undertake lower risk consumer credit business will pay an application fee of £100 if their consumer credit income is less that £50,000 per year, with larger firms charged £500.

For firms which carry out higher risk business and require full consumer credit permission, the FCA proposes charging the businesses based on how complex they anticipate processing the authorisation will be. The fees would range from £1,000 for a 'straightforward' activity such as credit broking to £15,000 for the 'very complex' activity of providing credit references.

In setting out its approach to charging annual fees to consumer credit firms, the FCA has proposed fees based on companies' income, with lower fees for firms with limited permissions. Not-for-profit organisations which provide debt counselling will be exempt from fees and there will be concessions for credit unions and community benefit societies.

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In addition to setting out its proposed fees for consumer credit providers, the FCA is also consulting on a new fee block for investment firms that safeguard or administer assets, or hold client money; fees for approved reporting mechanisms; and some minor adjustments to the fees regime, including a requirement for application fees to be paid by credit or debit card.

The FCA is entirely funded by the firms it regulates, ensuring that the taxpayer does not have to cover the cost of overseeing the financial services.

When deciding on fees, the FCA takes into account the cost of supervising firms to ensure markets function well.

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