Nov 25 2009
Commenting on HM Treasurys Mortgage Regulation recommendations, Fiona Hoyle, Head of Consumer Finance at the Finance & Leasing Association, said:

Second-charge lenders are not opposed to a move to FSA regulation, but they have yet to be persuaded that there is a compelling case for change. The current legislative standards already provide comprehensive consumer protection, which is reflected in the low level of repossessions1.

The Governments proposals will see second charge mortgage regulation divided between the Office of Fair Trading and the FSA. Two different regulators and two separate regulatory regimes could create confusion for both lenders and consumers. Close co-operation between the FSA and OFT will therefore be essential.

Second charge mortgages are for much smaller amounts than mortgages for the purchase of a home. We therefore urge the FSA to ensure its current review of mortgage regulation fully recognises these differences and avoids a one-size-fits all approach. This could damage the market, as well as consumer choice.

The FLA is the leading trade association for the asset, consumer and motor finance sectors in the UK, covering secured and unsecured loans and credit and store card providers. In 2008 FLA members provided 60 billion to the consumer finance sector, representing almost 30% of all unsecured lending in the UK in 2008.

Notes
1. Second-charge lenders repossessed 411 properties in Q3 of 2009