Brokers call for FSA to police seconds
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Speaking at the Mortgage Strategy and Loandistributor.co.uk secured loan round table yesterday, Robert Sinclair, director of the AFB, says 97% of the feedback from the paper backed FSA regulation.
The secured loan market is currently regulated by the Consumer Credit Act, with firms accountable to the Office of Fair Trading, but Sinclair says there is a mood afoot politically to regulate seconds more closely, which is why the AFB produced the paper.
Sinclair says: “We did not get as much feedback as we wanted but 97% of respondents thought FSA regulation would be a good idea. I always worry about the silent minority though.”
The AFB board will decide this week whether it will lobby the government for regulatory change.
Opinion was divided at the round table as to whether the FSA would be suitable to regulate secured loans.
Steve Walker, managing director of Promise Solutions, says: “We have some clearly defined rules at the moment but some of them are outdated, irrelevant and not enforced. A happy compromise would be for the FSA to regulate the market in terms of rigour but I’m not sure we need the same level of compliance and costs as the mortgage market.”
John Parker, chief executive of the Finance Industry Standards Association, says the key flaw with the current regulatory system is that the OFT does not have the resources to monitor the market but adds that there is not necessarily a problem with the market’s standards.
He says: “The difference between the OFT and the FSA is that the FSA has lots of staff to check compliance while the OFT does not, so firms can get away with not complying with the existing regulatory system.”
But Kam Sanghani, managing director of secured loan lender White Label Loans believes the industry should work with the status quo.
He says: “The industry should not be looking towards the FSA to tell it what to do. Lenders and brokers need to embrace the CCA, Treating Customers Fairly and responsible lending. We do not need the extra paperwork of FSA regulation.”
Source:
Loan Distributor
