The Financial Services Consumer Panel has called for the new Financial Conduct Authority (FCA) to be given full responsibility for the regulation of retail financial services, including consumer credit.
Currently the FSA regulates the notification of an unauthorised overdraft and the grounds on which payments may be bounced but not the overdraft itself, which is regulated by the Office of Fair Trading (OFT).
The FCA will take over from the FSA once the anticipated Financial Services Bill is enacted. The Consumer Panel believes that consumer credit regulation should also be transferred from the OFT to the FCA.
A subsequent review would then examine when it would be appropriate to move to an integrated Financial Services and Markets Act-based regime.
Adam Phillips, chair of the Consumer Panel, commented: "The Panel is calling for a common sense reform that will enhance consumer protection.
"Transferring the Consumer Credit Act powers to the FCA will make retail financial services regulation work in the way most people expect.
"The Government can only deliver its vision of a powerful conduct regulator if the FCA has comprehensive responsibility for the whole retail market whether consumers are saving or borrowing money."
"The creation of the new regulator is a golden opportunity to end the historical anomaly that leaves consumer credit alone outside FSA regulation."
The Treasury and the Department for Business and Skills are shortly due to announce the results of their consultation on how consumer credit should be regulated.
Completes legal process
Premises to remain closed until at least mid-February
Set up by David Cameron in 2012
Despite ‘overwhelmingly positive’ report
He takes over from MetLife’s Dominic Grinstead