The FCA’s impending regulation of secured loans represents a real opportunity for the industry, Sam Busfield, co-founder of Loans Warehouse, has said.
The FCA consultation paper ‘Implementation of the Mortgage Credit Directive and the new regime for second charge mortgages’ set out that second charges will be fully regulated by 21 March 2016. They will be classified as ‘regulated mortgage contracts’, meaning current regulation of first charges will apply.
Busfield said: “This is a genuine opportunity for our industry to seize. Being regulated on a par with first charge mortgages also means being considered.
“When a consumer is looking to raise additional funds they must be made aware of other possible options; remortgage, further advance, secured loan.
“This can be done as part of an initial disclosure rather than as part of the sales process but it means that we are now going to be in the consciousness of a whole new audience and that is a major opportunity for us all.”
There are currently 220 secured loan products from 17 different lenders.
Busfield added: “Working in an FCA regulated environment will mean qualifications need to be gained, that information provided is more standardised and that consumers feel more confident in the businesses and people they are dealing with.
“It is going to be challenging. It is a big change for all of us. It is also the opportunity for an industry that refused to be beaten by the recession to seize, work with and grow.”