In a speech to the High Level City Group, Tiner conceded that the current regulatory regime, with the Office of Fair Trading (OFT) covering some consumer credit transactions, was disjointed and that firms would find it much easier to deal with one regulator and one set of rules.
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He said: “The regulatory framework is disjointed, with first charge mortgages coming under the FSA’s risk-based regime but other types of credit subject to more of a licensing approach. I am certainly not saying that credit should be subject to the full rigours of regulation, nor am I advocating all 126,000 firms with a consumer credit licence be regulated by the FSA. For the many other small firms, it might be worth reviewing the benefits of regulation.
“But there are risks to consumers which I believe could be better dealt with through a more coherent and risk-based regulatory framework, which would also make more sense for the main lenders to only have to deal with one regulator and one set of regulations.”
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Steve Walker, managing director of Promise Finance, believed having one regulator would be of advantage but there would be significant challenges which would need to be overcome.
“I agree that it would make sense for everything to come under one regulator as there are standards in consumer credit which need to be raised, especially when it comes to advertising online. I think the FSA would be more effective at this than the OFT. However, it would need to be thought through as secured loans is a very different market and I have my doubts over principles-based regulation and how small firms would cope.”
