The Association of Finance Brokers has called on the Treasury and the Department for Business, Enterprise and Regulatory Reform to pass responsibility for regulation of second and subsequent charge residential lending to the Financial Services Authority.
In response to the recently published proposed guidance in the second charge lending market by the Office of Fair Trading, AFB announced proposals to include the second charge lending market under the regulatory regime of the FSA.
Robert Sinclair, director of AFB, says: “AFB published a White Paper and member consultation on the future of regulation for secured lending in September 2008. The results from this consultation showed overwhelming member support for regulation of second charge lending by FSA.
“OFT’s latest proposed guidance, parts of which AFB agree with in principle, could be logically replicated within the Mortgage Conduct of Business regime with FSA.
“This would allow the impending implementation of the European Consumer Credit Directive to be limited to unsecured credit, while providing an alternative, robust regime for second charge lending. This would benefit intermediaries, lenders and consumers.
“AFB is therefore calling for the only realistic option for the industry, an alternative regulatory regime under the FSA.”