In an address
to this year’s Finance and Leasing Association (FLA) dinner, Black
Horse managing director and FLA chairman Chris Sutton warned recent
implementation of the Consumer Credit Directive 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 is 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 added 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”.
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