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FLA boss Stephen Sklaroff says FCA regulations are "not there yet"

Tribute was paid to the “energy and resilience” of the car finance sector when Stephen Sklaroff addressed the FLA’s 12th annual Motor Finance Convention.

The director general of the Finance and Leasing Association praised the way business had come through the financial crisis and wholesale regulation changes within the motor finance industry to record volumes up 8% compared with the same period in the previous year and a 13% rise in the value of new advances.

Point-of-sale consumer new and used car finance markets have also seen new business grow at similar rates so far in 2015, up by 9% and 8% respectively. 

But addressing the conference at the Williams F1 Conference Centre Sklaroff urged the FCA to consider future developments of the regulatory regime carefully.

He said that the FCA needs to know the market, and those subject to the consumer credit regime need to have some clarity about what is expected of them, adding that the system was “not there yet”.

A survey of FLA members earlier this year revealed that 62% felt they were “well prepared” for the FCA regulations, almost double the 34% recorded a year before.

When asked 66% of members said that the FCA needed a more detailed knowledge of the industry, something that the FLA are helping them to achieve, setting up a Regulatory Working Group and speaking to FCA supervisors, authorisation staff and policy-makers.

Sklaroff said that future FCA changes were now in the pipeline that would attempt to address credit-worthiness and affordability, staff incentives, credit cards, debt management, second-charge mortgage lending, and a variety of other areas.

He added: “One area on which the FLA will be doing further work in the near future is the old chestnut of intermediary remuneration.

“Although the FCA originally told us that they intended to complete their work on sales incentives for internal staff before moving on to brokers and dealers, we have heard in the last few days that they are accelerating their work in the intermediary market.

“Partly in response to the CMA’s recent work in the payday lending markets, the FCA has now decided to do some further work on the ‘range and impact of different remuneration models in the wider credit broking market to help them consider whether there are any gaps in the current rules that need filling and whether additional rules are required.”

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