Speech: Greg Stevens at the Credit Week Parliamentary Reception
Commentary | 19/03/19
Credit Week 2019: Parliamentary Reception
Date: 19 March 2019
Venue: Houses of Parliament
Time: 12.15 to 3.00 p.m.
Good afternoon, it’s a pleasure to be here celebrating Credit Week with you.
I would like to thank Credit Strategy for organising, and our parliamentary hosts for welcoming us to the Houses of Parliament.
I’m Greg Stevens the Chief Executive of the CCTA, which is the largest of the consumer credit trade associations.
We represent over 200 businesses, including lenders, brokers, debt purchasers and suppliers to the industry. Most of my members are small businesses serving local communities.
My message today is about the proportionality of credit regulation.
The regulator has a balance to strike between maintaining deep and fluid credit flows on the one hand, and appropriate levels of protection for consumers on the other.
It is a difficult balance to strike, but it’s essential for serving the consumer’s interests.
Get it wrong in one direction, and you restrict legal supply and cause financial exclusion.
Get it wrong in the other, and you can encourage irresponsible lending.
The FCA recognises the importance of keeping legal credit flowing. After all, without access to regulated sources of credit, there isn’t any consumer protection at all.
Yet the sheer volume of regulation in the last 5 years, coupled with a spike in claims activity, are causing more businesses to exit the market.
In parallel, the FCA’s own figures show a sharp rise in the number of consumers borrowing from ‘friends and family’ and illegal lenders.
A key factor, in our view, is the FCA’s new rules on ‘affordability’.
Tighter affordability rules mean many lenders are having to stop lending to certain groups of consumers.
This includes customers on lower incomes with the fewest choices.
But the tighter the restrictions, the higher up the socio-economic scale the cut-off goes.
As a result, larger numbers of borrowers risk becoming excluded because, according to the regulator, they cannot afford to borrow.