AFB concern over Consumer Credit Licence guidance

AFB officials met the Office of Fair Trading during the review process of the Consumer Credit Licenses: draft guidance on fitness and requirements. The AFB is concerned proposals to look at firms’ policies surrounding irresponsible lending in approving or renewing licenses has the potential to adversely impact on the availability of advice on credit.

Borrowers could also be forced to turn to alternative funding, which has the potential for considerable consumer detriment.

Robert Sinclair, director of the AFB, said as the draft guidelines stood, it feared some intermediaries and lenders could withdraw from the UK market due to the risk of ‘reputational’ damage. He added: “They may consider that the costs associated with the requirement to build compliant processes will outweigh any commercial benefit.”

Sinclair said current requirements could create an imbalanced regulatory playing field that some borrowers could be obliged to turn to alternative funding. He added: “Either way, the potential for consumer detriment is considerable.”