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FLA chief predicts key changes to credit by 2014

By Tony Willard

A new round of training in regulatory changes is on the horizon as the Government prepares to introduce important alterations to consumer credit in 2014. The way dealers sell showroom loans is bound to come under close scrutiny.

The Finance & Leasing Association is working closely with the Department for Business Innovations and Skills, and a senior official attended last month’s FLA motor finance convention.

Dealer finance rose to 70.2% of the total in the year to October, which means it is likely to be high on the Government’s consumer credit agenda.

Paul Harrison, FLA head of motor finance, said: “The FLA is working with Government departments and the Financial Services Authority on future changes to consumer credit.

“They are very engaged with our views and understand our concerns on their current proposals.

“We expect the Government to publish its high-level proposals for the new regime by February.”

Harrison believes the motor finance sector is in a strong position to cope with the regulatory changes to consumer credit in 2014 and beyond.

“We will continue to work with the Government to ensure its plans will not damage the competitiveness of the sector,” he said.
A year ago the FLA was expecting the supermarket banks and other financial institutions to try to win back their share of new car finance lost to dealers.

Harrison said: “That didn’t happen, largely because of the banks’ perceived risks versus returns and the extended recession.

“It was also because the banks could see that secured showroom loans on cars are so attractive to consumers. I’m sure Tesco Bank and others will mount a challenge in the future when conditions change.”

 



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