Last week the regulator held talks with the Association of Short Term Lenders and a number of short term lenders to try to define how short term lending fits into its Mortgage Market Review consultation.
The FSA’s aim is to ascertain whether short term lending should be regulated as strictly as mainstream residential mortgage contracts. Currently secured second charge loans – something many unregulated short term lenders offer – are regulated by the Office of Fair Trading but they will fall under the FSA’s remit from 2012.
Adrian Bloomfield, chief executive of the ASTL, said: “It was a comfortable meeting and we found it constructive. It’s particularly pleasing that the FSA seems prepared to listen to what we have to say and our concerns before proposing various changes to regulation affecting the short term lending sector.
“I believe the FSA is trying to accommodate short term lending so they don’t inadvertently regulate in a way which would substantially damage our sector. They are giving careful consideration to the preservation of short term sector.”
One lender attending the meeting, who did not wish to be named, said: “It was best meeting I’ve ever had with the FSA. They genuinely made an attempt to understand the short term sector and realise that short term lending is effectively a sector within a sector.
“They seemed much more approachable than they have in the past, though time will tell whether they took on board what was said.”
An FSA spokesman said: "As you'd expect, the FSA regularly meets stakeholders in the mortgage market to discuss issues and developments."
