In Focus Risk


A manifesto for the credit industry


In a time of political turmoil and change, one trade body sets out its vision for the future


Edward Simpson Head of government affairs, the Finance & Leasing Association


We published our own manifesto during the recent election campaign, and used it to brief candidates on our concerns in a number of areas of public policy. In particular, we used the manifesto to


describe some of the measures the new government could undertake to help maintain and build confidence among consumers and firms during the imminent Brexit negotiations. We will be using the manifesto to brief


new front-bench spokespeople as they are appointed following the election. Our main points are as follows.


Modernising consumer credit rules Although the current system of regulation is quite recent in some respects, it incorporates some very old bits of legislation, drafted in the mid-1970s – long before the advent of modern communications technology. The Consumer Credit Act (CCA) makes


it more difficult for lenders to exercise forbearance when their customers are experiencing difficulties in making repayments. It also requires companies to provide customers with the Standard European Consumer Credit Information (or SECCI for short) which requires between 30 and 150 ‘swipes’ on a smartphone or tablet to read. The act also includes sanctions designed


for an era before the existence of a dedicated regulator like the Financial Conduct Authority (FCA), whose powers make many of the CCA’s provisions redundant or actively counter-productive for both consumers and lenders.


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The British Business Bank’s (BBB) existing ‘Business Finance Guide’ website would provide a fine basis for the portal, and we would welcome the opportunity to work with the BBB to develop such a ‘first-stop shop’


Supporting investment in the UK economy Our members enable millions of UK businesses to invest in new machinery and equipment. Many of the UK’s most important economic sectors – including manufacturing, transport, construction, agriculture, and retail – benefit from the leasing and hire purchase contracts provided by our members. An application success rate of 96% makes


this form of finance an essential component of any successful industrial policy. However, awareness of asset finance remains a limiting factor, especially for SMEs. The government could help by sponsoring


So our consumer-credit recommendations


are to: l Adopt a proportionate approach to consumer-credit regulation, reflecting the diversity of today’s lending markets. lModernise out-of-date legislation, including the 1974 CCA, so as to: l Iron out inconsistencies with the FCA’s other powers. l Ensure modern IT-savvy customers get the information they need, in the format they prefer, when they need it, in order to make informed decisions when they apply for credit. l Take a sober, medium-term view of which current EU rules make sense, and which actually get in the way of good customer service.


www.CCRMagazine.co.uk


the creation of an online Small Business Financing Options Portal to provide a comprehensive, impartial, online list of the funding sources available to UK SMEs. It could include links to the finance companies that offer SME finance, allowing small firms to apply direct to lenders. The British Business Bank’s (BBB)


existing ‘Business Finance Guide’ website would provide an excellent basis for the portal, and we would welcome the chance to work with the BBB to develop such a ‘first-stop shop’. In addition to the problems, the existing


system of regulation creates for the consumer- credit markets, the CCA also applies to the finance provided to hundreds of thousands of small businesses – a market for which it is ill-suited. The result is that many lenders and


brokers have reduced the amount they lend to small businesses.


July 2017


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