Responding to the Consumer White Paper, the FLA said it is committed to promoting responsible lending and delivering real help now for customers in financial difficulties. It also supports a number of recent measures to help people in trouble, including: a "breathing space" for unsecured credit borrowers with debt problems allowing them time to get the help they need; working with the Government to deal with firms which mislead people over the possibility of writing off their debts; and helping to develop a self-help debt advice toolkit.
But it believes the risk now is that a proliferation of regulatory reviews and consultations, coupled with the further regulation already in the pipeline, could cause the market to shrink further. The consequences for the availability of credit could be serious.
Commenting, Fiona Hoyle, the FLA's head of consumer finance, said: "The industry strongly supports responsible lending and we welcome some of the measures in the White Paper. But we already face a barrage of new regulation. There are now real risks for consumers who face reduced credit availability and higher prices.
"The Government needs to take action to deal with the wholesale funding problems in parts of the credit market, and should avoid regulatory over-load. The real challenge now is to maintain availability and affordability of credit, which are under threat."
