Apply to become a consumer credit lender or hirer

Consumer credit lending is only Limited Permission if it's carried on by:

• a local authority, or
• a supplier, where no charge (by way of interest or otherwise) is payable by the borrower and the agreements are not hire purchase or conditional sale agreements

Consumer hire is Limited Permission. This means firms that only ever enter into consumer hire agreements and exercise, or have the right to exercise, the owners’ rights and duties under a consumer hire agreement are Limited Permission firms.

Remember that if none the criteria above apply to your firm, you'll be a Full Permission firm.

Here are some common scenarios in which applicants apply to be Limited Permission by mistake – if any of these points apply to you, you'll be a Full Permission firm:

• you add interest or any other charges (including late payment fees or default charges) to the agreements
• the credit isn’t being used to fund the supply of goods or services by you to the borrower/customer
• debt administration and debt collection
• debt counselling and debt adjusting when carried on as the firm's main business
• providing credit references
• providing credit information services that aren't connected to Limited Permission activities
• operating an electronic system (peer-to-peer lending)

Please include:

• full details of your funding for lending – including any covenants, terms or conditions that might drive poor conduct, and how you plan to make sure this doesn't happen
• the types of business your firm intends to be involved in, your target market and the steps you've taken to ensure that your products/services will meet your customers’ needs
• the types of lending products and their features (including loan sizes and volumes), the interest rates and other fees that will be charges, and the terms and conditions of all agreements
• how you'll distribute your products (eg through a broker network, via a price comparison website, through appointed representatives, etc)

Please include:

• full details of your funding for lending – including any terms or conditions that could drive poor conduct, and how you plan to make sure this doesn't happen
• the types of business your firm intends to be involved in, your target market and the steps you've taken to ensure that your products/services will meet your customers’ needs
• the types of lending products and their features (including loan sizes and volumes), the interest rates and other fees that will be charges, and the terms and conditions of all agreements
• how you'll distribute your products (eg through a broker network, via a price comparison website, through appointed representatives, etc)

High-cost short-term credit providers
We expect to see how your firm will comply with our price cap and rules on CPAs and refinancing.

Logbook loan providers
We expect to see that features of the products are transparent and clear to consumers, as well as whether all fees and charges are explained, along with a full disclosure that the title of vehicles transfer to the firm and so it can repossess without a court order.

Home collected credit providers
We expect to see whether there are sufficient controls/oversight over collectors/agents in customers’ homes, and whether point-of-sale information including agreement and pre-contract information provide sufficient detail and are adequately explained to customers.

Pawnbrokers
We expect to see the firm’s loan-to-value ratios and whether they exceed the National Pawnbrokers Association (NPA) recommendations, details of all fees and charges, the approach to pawning multiple items, and whether the credit agreements comply with the Agreement Regulations, which include specific provisions for the content of pawn agreements.

We also expect to see how the firm keeps pawned items safe and how it obtains the true value of items, the approach to surplus when an unredeemed pledge is sold above the redemption value, and the approach to tacking financial crime.

You should confirm whether you'll be joining the NPA, and  and make clear whether you intend to collect any shortfalls between the price the pledge is sold for and the loan that was granted, as this is key to determining whether our affordability rules apply or not.

Guarantor loan providers
We expect to see how the firm will ensure guarantors fully understand they will become liable for the debt if the borrower stops paying, and that point of sale information including agreement and pre-contract information is sufficiently detailed. Additionally, we expect to see details of all fees and charges, the approach to relending and the use of CPAs, as well as how the firm will calculate redress for upheld complaints.

Please include:

• the types of business your firm intends to be involved in (eg your target market and customer profile) and how your products/services will meet customers' needs
• the types of lending products and their features (including loan sizes and volumes), the interest rates and other fees that will be charges, and the terms and conditions of all agreements
• how you'll distribute your products (eg through a broker network, via a price comparison website, through appointed representatives, etc)
• how you'll choose which brokers/distributors to work with and how you've considered the outcomes retail customers will achieve
• if you plan to use immobilisers, how you've ensured that their use is compatible with our Consumer Duty[6]

Please include:

• the types of business your firm intends to be involved in (eg your target market and customer profile)
• the types of lending products and their features (including loan sizes and volumes), the interest rates and other fees that will be charges, and the terms and conditions of all agreements
• how you'll distribute your products (eg through a broker network, via a price comparison website, through appointed representatives, etc)
• how you'll choose which retailers/service providers to work with and how you've considered the outcomes retail customers will achieve
• whether your firm plans to make use of Continuous Payment Authorities (CPAs) and, if so, how you'll use this appropriately

Please pay particular attention to this section on the supporting material[10] page.

As a lender, we expect to see policies and processes that clearly demonstrate how you'll:

• assess credit risk, including how staff or systems would do this in practice and when you wouldn't lend to customer
• determine a customer’s affordability – again, explain how staff or systems would do this
• use data if you plan to use Office of National Statistic (ONS) data or open banking – explain which data you'll use, why you deem those data to be appropriate and how non-standard (eg self-employed) income and expenditure would be assessed
• identify customers at risk of financial difficulty, and what you'll do to help them
• mange customers that fall into arrears, including the options you'll offer them and how, in practice, your staff/systems will determine which option to offer in any given situation
• monitor lending and arrears data so you can act to deliver consistently good outcomes to retail customers