Following the publication of new white paper on the future of the future regulation of the secured loans industry, the Association of Finance Brokers (AFB) has called upon intermediaries to give their thoughts.
As a result of a new white paper regarding impending regulation of the secured loans industry, the AFB (Association of Finance Brokers), has asked for its members thoughts on the issue.
It is asking for answers on a number of regulation issues before the 20th of September. Among the proposals included in the paper is the option to remain under regulatory control of the Office of Fair Trading and the Consumer Credit Act, or to concede all regulatory powers to the Financial Services Authority (FSA). The group noted that - against the backdrop of the implementation of the Europe-wide Consumer Credit Directive - it is inevitable that the regulatory landscape of the secured loans industry will undergo substantial transformation.
The AFB was established to promote the views of secured loans brokers operating in the UK and focuses on lobbying delegates in the Treasury, the Office of Fair Trading, as well as the FSA, the government and EU policymakers. In doing so, it aims to promote the interests of the industry in a constructive way that connects regulators and lawmakers with the "front line" of the secured loans market.
Commenting on the new proposals, Robert Sinclair, director of the AFB, urged intermediaries to act in a progressive manner to ensure that new regulatory instruments protect the interest of brokers, loan providers and the consumer. He added that the public need to be put at the heart of any new legislation governing the secured loans market.
"Consumers and consumer groups are likely to see a move to FSA regulation as positive. A better understanding of secured loans lending could add to product popularity, and better awareness of the industry. Secured lending has a part to play in debt financing but it is vital consumers are treated fairly and well protected. We have discussed this with both the regulators and the government and they are eager for the industry to find its own answers. Otherwise we will lose that power," Mr Sinclair claimed.
Furthermore, with the EU directive affecting the entire unsecured loan market, the industry will have to introduce step-change legislation that will fundamentally alter the way that secured loans are promoted and sold, he claimed. Because of this, he reminded stakeholders that there was no time for procrastination and disagreement, both of which could weaken the industry at a time when it needs to take strong action to ensure that the views of all interested parties are fairly represented in the new regulatory framework governing the secured loans market, he concluded.
Opting for a secured loan may be of interest to people who plan on making large purchases, or who intend to carry out structural work on their home. However, a report published by Moneyfacts published in July warned homeowners that they may find their ability to get a secured loan is diminished due to poor market conditions. It noted that seven major secured loans providers have exited the marketplace as the credit crunch tighten its grip on the industry.
Cash Strapped Brits Worried About Christmas
As the festive season approaches, the struggles that everyday people go through have been highlighted.
Recession Biting Hard For More Brits
More than 20 million Britons lack the funds to put money aside during the current economic downturn, AXA has claimed.
Inflation Expectations Hit Series High
Britains expectation of further inflation in the next 12 months was at a series high in August, new figures from the Bank of England and GfK NOP show.
