Firms offering consumer credit are likely to allowed to continue as long as it is central to the legal services they provide.
The Solicitors Regulation Authority says the proposal, outlined in a consultation document last week, could resolve the thorny issue of how best to regulate solicitors providing consumer credit services.
Responsibility for regulating consumer credit work transferred from the Office of Fair Trading to the Financial Conduct Authority (FCA), with the SRA suggesting it might have to stop regulating this type of work under the new regime. This raised the spectre of firms being required to comply with a new set of regulations from the FCA.
In January, the SRA secured a seven-month deferral of the decision following protests from members of the legal profession.
Now it has drawn up proposals that would enable solicitors to carry out certain consumer credit activities, setting out a list of prohibited activities for client protection but ensuring firms are not over-burdened with additional rules.
Crispin Passmore, SRA executive director for policy, said: ‘Our discussions with the FCA have produced a set of proposals that will ensure regulation is balanced.
‘The proposals would focus regulation on the substantive activities undertaken by solicitors, in a way that would not be overly burdensome.’
The SRA is consulting on its new proposals until 6 August. Following the consultation, final recommendations on the regulatory approach are expected to be presented to the SRA board at its meeting in September.