The Finance Industry Standards Association has finally given up the ghost and decided to close its doors, so where does this leave the industry?
It comes as no surprise that a standards association that is mainly funded by lenders cannot survive on a handful of lender members, but the knock-on effect of FISAs withdrawal marks the end of an era for the sector.
Just as secured loans were starting to become mainstream, the sector has been forced to almost hibernate until the recession comes to an end.
The departure of FISA will make little difference to how a firm operates on a day to day basis, as many will still follow its code, but it will hit the morale of the secured loans sector.
The industry has already seen some well known names fade away and there is the fear that things could get worse.
Robert Sinclair, director of the Association of Finance Brokers made some interesting observations last week and predicted that it would be the medium sized master brokers that would suffer.
The larger firms have the funds and capacity to continue on a minimal basis and smaller brokers do not have to worry about costs, but as Sinclair pointed out, the sector has survived on just two lenders in the 1960s and it will survive again.
The recent news that the Treasury is to look at FSA regulation of the sector will put it on a par with mainstream mortgages.
FSA regulation would be like re-writing the rule book for the sector and although many people already follow the principles of treating customers fairly, an FSA stamp of approval will open up the industry to the wider mortgage market. Mortgage brokers will be able to understand the selling process and the thinking behind secured loans, which has already been suggested will leave the door open for them to sell secured loans directly.
The landscape of the secured loan market is changing and it is no longer a case of survival for each individual firms but for the sector as a whole.