The regime will be administered by the FSA’s successor body the Financial Conduct Authority (FCA).

The new regime will focus resources on higher risk firms, such as pay day lenders, pawnbrokers, credit reference agencies and debt collection.

Lower risk firms such as not-for-profit debt counselling will not have to meet such high standards and will pay lower fees

Martin Wheatley, FCA CEO designate, said: “Consumer credit inhabits every corner of our day to day financial lives. It is a broad church spanning everything from overdrafts to hire purchase to credit cards to debt advice, provided by tens of thousands of firms of all shapes and sizes.

“We will focus our efforts on the areas of highest risk, and ensure we use our resources sensibly and proportionately. The work we have done with consumer groups and trade bodies has helped us reach this point and will continue to help us make the transition as smooth as possible.

“This regime is a sensible approach to everyday finances. It will give consumers the protection they expect without placing an undue burden on the firms that service them.”

The Government announced earlier today that it would transfer responsibility for regulating consumer credit from the Office for Fair Trading (OFT) to the FCA by 1 April 2014.

This comes as the UK’s biggest payday lenders were told today they have 12 weeks to change their business practices or risk losing their licenses under new rules announced by the OFT.

The action follows a year-long review of the £2bn payday lending sector by the watchdog in which it found evidence of widespread irresponsible lending and failure to comply with standards.

The new rules are aimed at 50 leading lenders, which account for 90% of the payday market.