The Office of Fair Trading has published its Financial Services
Plan, which sets out its approach to the consumer lending sector in
the short and medium term.
The plan sets out how the OFT will “sharpen its focus over the
coming year” with two particular areas coming under the spotlight:
The short-term prioritisation of “promoting fairness and
responsibility between the credit industry and its customers,” and
the longer-term goal of making sure that “choice and competition”
are strongly emphasised, so that “public decisions made to deal
with the current economic crisis do not harm competition in the
long term to the detriment of consumers.”
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The Finance & Leasing Association gave the new plan a
cautious welcome. Head of consumer finance, Fiona Hoyle said: “We
are encouraged that the Office of Fair Trading has recognised that
regulatory intervention in financial services markets needs to be
proportionate. This is an essential requirement if we are to
sustain a competitive market with real choice for consumers.”
Pointing out that the consumer credit market has shrunk by a
fifth over the past year, she added: “The large volume of new
consumer credit regulation (both from Brussels and the UK
regulators), along with the continued freeze in the wholesale
funding markets are combining to put extra pressure on lenders just
when they are being called upon to help reinvigorate the economy.
Responsible regulation is as important as responsible lending.”
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