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Regulating all short-term lending ‘will help create a level playing field’ – Oblix

  • 02/10/2019
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Regulating all short-term lending ‘will help create a level playing field’ – Oblix
Oblix Capital has called for the commercial bridging industry to improve industry standards and transparency before regulation of the sector arrives.


The lender said it recognised there were potential positive and negative impacts of the Financial Conduct Authority (FCA) overseeing the industry, but being proactive would help reduce this disruption.


Collective commitment

Last month, Benson Hersch, CEO of the Association of Short Term Lenders (ASTL), wrote in Specialist Lending Solutions that “the writing is on the wall and regulation is coming to the short-term commercial lending sector”.

Hersch was responding to the Treasury Select Committee which in July stated that “the justification for leaving commercial lending outside the regulatory perimeter is feeble.”

In a statement, Oblix Capital sales director Andy Reid (pictured) argued that lenders and brokers must work together to support those with the highest standards.

He noted that brokers have a role to play in choosing to work with lenders that demonstrate a commitment to quality and this will encourage other lenders to raise their game.

“Only by collectively committing to better standards will we be able to ensure a strong position ahead of any potential regulation in the future,” he said.


Help create a level playing field

Reid agreed there were arguments both for and against the regulation of commercial bridging, noting that full regulation would be likely to increase costs for lenders and brokers.

“These additional costs could ultimately be passed onto the customer in the form of higher interest rates and/or fees, or could stifle product innovation,” he said.

“Additionally, while some brokers who currently deal exclusively in unregulated loans will change their business model should the market become fully regulated, others could choose to leave the industry altogether.”

But he added that there would be benefits: “The current situation can be confusing for consumers who may not understand how the purpose of a loan can impact their regulatory protection, and regulation across the whole market will help to create a level playing field and more simple choices.”

Reid continued: “Whatever happens in the future, we think the industry should continue to push to raise standards and transparency now.

“If we are able to demonstrate a collective commitment to high standards, regulation is likely to have a less disruptive impact on our practices if and when it is introduced.”


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