The Finance & Leasing Association (FLA) has said the issue of compliance costs and market exits must be addressed as the consumer credit industry prepares for regulation by the Financial Conduct Authority (FCA).
A revision of the Cost Benefit Analysis by the FCA has forecast a rise in both compliance costs and the number of companies to leave the industry after the Authority takes charge in April 2014.
Speaking ahead of the FLA’s Future of Consumer Credit Regulation conference, held 5 November, Stephen Sklaroff, director general of the Association, repeated the FCA had "listened" to the industry and "tailored" proposed regulation to suit.
Transition and vigilance
However, Sklaroff also repeated his warning over the shortness of the window for lenders and brokers, many of whom will be moving to a principles-based regime for the first time, to prepare for the Authority, and which may see companies leave the market.
"No-one wants to see a reduction in the provision of responsibly-provided credit," said Sklaroff. "So it is vital that we take the time to get the transition right."
Sklaroff will also use his speech to advise ‘vigilance’ over other changes to UK and European law, such as EU data protection proposals which could inhibit credit checking.