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Title:
Consultation document on consumer credit licensing – draft guidance on fitness and requirements [OFT 920con]
Reference ID:
1249
Problem Description:
In the report: “Evaluation of Regulatory Impact Assessments 2006-07” by the Comptroller and Auditor General dated 11 July 2007 it is stated that RIAs need to be completed for primary and secondary legislation, codes of practice and guidance. There no Impact Assessment, neither does there appear to be any Competition Assessment, for the Office of Fair Trading consultation document on “Consumer Credit Licensing – draft Guidance on Fitness and Requirements” [OFT 920con]. The OFT itself published guidance, “Completing Competition Assessments in Impact Assessments” (OFT876) in August 2007. It maintains that anyone completing an Impact Assessment (so this would include the OFT's own Guidance) is required to carry out a competition assessment. Impact assessments, the OFT guidance says, require policy makers to consider the impact – costs and benefits – of proposed policies. The competition assessment focuses on the impact of the proposed policy on competition in affected markets, assessing whether or not the policy is likely to have a significant impact on competition.
The lack of an Impact Assessment and Competition Assessment with the draft Licensing Guidance indicates that the OFT appears to be ignoring any impacts or competition issues that will arise. How can such guidance be considered in any way adequate if its effects have not been evaluated? It is my view that the Guidance in its current form will have significant impacts and anti-competitive effects, skewing the credit market in favour of large businesses that have the resources to undertake the complex requirements of the guidance, or if necessary, challenge the OFT’s views in the Courts. Small and medium sized businesses do not have these resources and may simply decide that their future is best protected by being subsumed within larger organisations.
This problem is caused by conflicting regulations or guidance.
Proposed solution:
A proper Impact Assessment and Competition Assessment should be undertaken to validate the appropriateness of the OFT Licensing Guidance.
Cost or time incurred:
All the unforseen costs that have failed to be idenfied because there is no Impact or Competition Assessment would be avoided.
Category(s):
Business and industry
This idea has been Rejected.
Rejected reason
This idea or suggestion has been rejected as it raises an issue that does not fall within the remit of the Better Regulation website.
Official response
This idea or suggestion has been rejected as it raises an issue that does not fall within the remit of the Better Regulation website.