FISA is strongly urging the OFT to conduct a narrow and focused project which delivers a quick outcome and produces outputs that can be incorporated within the OFT licensing regime.
FISA believes the project should be focused on two areas. Firstly, the decision to lend and how the assessment of affordability is undertaken at that point - FISA favours a requirement that all lenders should have a Responsible Lending policy owned by their Board. Secondly, that for intermediated products such as secured loans, the project should deliver clarity about broker’s responsibilities in relation to the advice they give to consumers about suitable products.
FISA also believes the output of the project should be Guidance which is specific to different areas of consumer credit as the lending decisions vary greatly, however, the OFT needs to ensure that no one area of consumer credit receives a competitive advantage over another
John Parker, Chief Executive of FISA, commented: "FISA recognises the importance of this OFT project and has been involved from a very early stage. In the current economic and political climate the need to avoid irresponsible lending is of critical importance. It is all the more important that the project focuses on the right areas and delivers its output in a short space of time. We believe there is little to be gained from the OFT looking at areas such as advertising, the sale of associated products and account management, all of which are already subject to regulation by the OFT, FSA and other bodies. Producing guidance to help define the responsibilities of both lenders and brokers will be of major importance and we look forward to continuing our work with the OFT to help the shape the project.”
For more information on the Finance Industry Standards Association (FISA) and to view the full response, visit: www.fisa.co.uk
