The broker believes it signals the start of a new era for the secured loans industry.
Tony Machin, group managing director at Freedom Finance, said: “The formation of the AFB as a sister trade body to AMI is an excellent development which deserves the support of every broker involved in the loans market. For too long loan brokers have been without an effective trade body to represent their views and lobby on their behalf.
“This lack of representation has been only too evident during recent months as key issues relating to the loans market have been debated by regulatory bodies, consumer groups and in the media. Loan brokers need to make their collective voices heard and I have no doubt that the AFB, supported by AMI and AIFA, will do an excellent job. I strongly urge all members of the CFB, which will be wound-up to become the AFB, to support this important move. Non CFB members should also support this initiative.”
Assuming that the special resolution is passed at the EGM on 25 May to form the AFB, Freedom Finance will resign its membership of the Finance Industry Standards Association (FISA), to become a member of AFB.
Tony Machin explained: “FISA, unlike the AFB, is not a trade body whose role is to represent the interest of its members and to lobby on their behalf. It is a trading standards body which is controlled by lenders. Freedom Finance is not a lender, it is a loan broker and as such is better represented by AFB whose sole purpose is to represent our interests.
“I believe that FISA has played an important role in the past, but the time has come to move on. FISA’s role as a trading standards organisation for brokers has now been replaced by the FSA and a more active OFT. FISA should continue to represent the interest of lenders in the same way that IMLA represents the interest of intermediary mortgage lenders. However, I do not believe it is any longer appropriate for FISA to continue to bridge the divide between loan brokers and lenders; it cannot be all things to all men.”
Freedom Finance has developed a guide which explains the key facts which consumers need to be aware of when taking out a secured loan. This guide will replace FISA’s booklet and the cost saving will be reallocated to fund Freedom’s membership of the new trade body. Freedom Lending will be happy to make its guide available to interested parties such as the FSA, OFT and Consumers Association.
Chris Cummings, director-general of AMI and AIFA, said: "The formation of the AFB has not yet been approved and is subject to a special resolution being passed at an EGM being held on 25 May. The AFB does not therefore yet have a policy regarding FISA or the points raised by Tony Machin.
“I can confirm, however, that if the AFB is approved on 25th, I will be keen to talk to FISA to discuss the many issues facing the industry. I am delighted by the level of support shown by Freedom Finance and other members of the broker community to the proposed formation of the AFB."
Machin concluded: “I’m sure Chris Cummings will testify that establishing a new trade body is initially an uphill struggle and the AFB therefore deserves the full support of all loan brokers at this critical stage of its development. By supporting the AFB, loan brokers will not only have a professional trade body to represent their interests, but also a forum in which they can share their views and an organisation which will be extremely cost effective to join. I urge all loan brokers to give this initiative their full support.”
