White Paper response could see AFB lobbying for FSA regulation
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An overwhelming 97% of res-pondents to its White Paper on the future of the sector felt it should be policed by the FSA.
Respondents also put forward proposals for the introduction of an exam and extra training for secured loan brokers.
Robert Sinclair, director of the AFB, says: "We believe FSA regulation could go some way to improving the perception of secured loan lending.
"This could then lead to increased interest in products and a wider acknowledgement of the sector."
The market is currently regulated by the Consumer Credit Act, with firms accountable to the Office of Fair Trading.
John Parker, chief executive of the Finance Industry Standards Asso- ciation, says the key flaw with the current regulatory system is that the OFT does not have the resources to monitor the market.
But he adds that there is not necessarily a problem with standards of practice in the sector.
He says: "The difference between the OFT and the FSA is that the latter has lots of staff to check compliance while the OFT does not, so firms can get away with non-compliance."
But Kam Sanghani, managing director of secured loan lender White Label Loans, believes the industry should work with the status quo.
He says: "We shouldn't be looking to the FSA to tell us 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."
