In an address to attendees of this year’s
Finance and Leasing Association (FLA) dinner, Black Horse managing
director and FLA chairman Chris Sutton warned that the recent
implementation of the Consumer Credit Directive (CCD) would be only
the first in a series of regulatory hurdles for the motor finance
industry to tackle.

“After the recent whirlwind of regulatory
change a period of calm would be nice, but it’s not going to
happen,” he said.

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Sutton continued to explain that the upcoming
transfer of regulatory responsibility from the Office of Fair
Trading to the new Financial Conduct Authority (which will replace
the FSA), would be just the beginning of “the biggest shake-up in
consumer credit regulation for a generation.”

He continued: “The government has also
suggested an entirely new regime, which would replace four decades
of consumer credit law with a system based on the current FSA
regime for the deposit-taking markets. The change could hardly be
more fundamental.”

Sutton commented that the biggest problem with
applying the FSA regime to regulation of the credit markets would
be “the fundamental difference between the basic retail credit
transaction – in which the main risk lies with the lender – and the
basic deposit transaction – where the main risk lies with the
depositor.”

Nevertheless, Sutton said that the motor
finance industry had seen a year of growth – as evidenced by the
size of the audience he spoke to.

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The event saw its highest attendance figure
since the beginning of the economic crisis in 2007, with over 1400
members of the motor and asset finance industries attending the
event on 22 February.

Companies represented at the event were
responsible for more than £70 billion of lending to UK consumers
and businesses over 2010, including £18 billion of consumer car
finance.