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Social Housing Speed Read – Ensuring compliance on consumer credit

We take a look at developments within the domain of consumer credit and the requirements that are relevant to the sector following the release of updated guidance from the National Housing Federation.


If an organisation engages in ‘regulated activity’, which includes consumer credit activity, then it must have authorisation from the Financial Conduct Authority (FCA) before doing so; unless an exemption applies.

It is worth noting that being authorised in this manner by the FCA is not the same as being on the FCA register (as a Registered Society, Co-Operative Society or Community Benefit Society for example).

Essentially, any activity that a housing association carries out that involves an agreement with an individual for the provision of credit or financial accommodation will be treated as a credit agreement under which authorisation is required, unless there is an exemption that applies.

Wide scope

The National Housing Federation guidance highlights that it is important for housing associations to be aware that the consumer credit regime doesn’t just apply to loans (and other forms of financial accommodation). Other activities as set out in the guidance include:

  • credit broking
  • debt adjusting
  • debt counselling
  • debt collecting
  • debt administration
  • regulated consumer hire agreements
  • credit information services.

Current position

The FCA reclassified the way it regulated lending by Housing Associations in March 2016.

For historical loans, it depends as to the date the secured loan was entered into as to whether a housing authority must be FCA authorised to administer and receive payment under the loan.

Secured loans entered into after 20 March 2016 are not consumer credit regulated but are subject to the FCA’s Mortgage Code of Business (unless an exemption applies).


There are exemptions that could be relevant meaning authorisation of the FCA is not required in respect of the consumer credit regime. For example, if the loan in question is interest free then an exemption will apply.

Moreover, if the loan is a “restricted public loan” then an exemption will apply. Such loans are those made in accordance with legislation that has a “general interest purpose”.

The application of such exemptions really depend on the specific circumstances of each case.

Moreover, the legislation that governs the exemptions is subject to change. It is therefore important that users of such exemptions are confident that they can be utilised.

Regular review

The above clearly demonstrates that consumer credit permissions should be regularly reviewed to ensure compliance, particularly if there are changes to activities that an association undertakes.

If you have any questions on the above and how it will affect social housing providers, or any other questions as a social housing provider, please do not hesitate to contact John Murray or a member of our expert Social Housing Team.

Please note that this briefing is designed to be informative, not advisory and represents our understanding of English law and practice as at the date indicated. We would always recommend that you should seek specific guidance on any particular legal issue.

This page may contain links that direct you to third party websites. We have no control over and are not responsible for the content, use by you or availability of those third party websites, for any products or services you buy through those sites or for the treatment of any personal information you provide to the third party.

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