Regulate with care, FLA tells government
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The government should act cautiously when regulating or risk punishing consumers, says the Financial and Leasing Association.
The FLA says the government must take care to avoid unintended consequences for lenders and customers with any new regulation for consumer credit.
Speaking at the Consumer Finance Conference Stephen Sklaroff, director general of the FLA, spoke to around 100 delegates of banks, building societies and store credit providers.
He says the industry is still implementing a huge volume of regulation created by the previous government and that the costs could reduce availability and affordability to customers.
Sklaroff says: “If we are to avoid the serious social and economic consequences of a smaller, more polarised consumer credit market, a proper balance needs to be struck between consumer protection and maintaining a competitive market.”
The FLA adds that some customers are already finding it hard to get credit in the regulated markets, raising the risk of financial exclusion and, as a result, more frequent recourse to loan sharks.
In April the amount of credit granted by FLA members was 9% lower than in April 2009.
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