Future of consumer credit “still uncertain” despite decisive election

In an appeal directed at the new government, the Consumer Finance Association (CFA) said “there is a hope that the era of political and economic uncertainty which has dogged the UK for such a long time will soon come to an end”.

The body said greater collaboration between financial institutions and government is needed to “improve the way consumer credit works for the customer”.

It also called for the stabilisation of the regulatory framework for the consumer credit market.

“Consumers need a regulated market that consistently delivers, rather than accessing de-regulated alternatives,” it said. “To avoid further damage to the alternative consumer credit market, the next government must find solutions to stabilise the regulatory environment and deliver some certainty.”

The sector has suffered badly over the last year, with several lenders either collapsing or exiting the market, citing regulatory pressures.

This week alone, DJS, the owner of Piggybank entered administration, as did MMP Financial, which traded as My Money Partner and Swift Sterling.

CFA chief executive Jason Wassell said: “We know that we will be exiting the European Union and can reasonably expect to see the Conservatives holding political influence for the next decade.

“However, the future of consumer credit continues to be uncertain. We do believe that the government must find solutions to stabilise the regulatory environment. We would be delighted if they could share some of their ‘certainty’ with us so that we can better serve our customers and introduce innovation.

“This is now the time to think strategically about the consumer credit that people will need over this next decade and how it should be regulated. There has been a big debate about creating a new economy. In that new economy, consumers will need products that suit their everyday credit needs. They deserve a regulated market that consistently delivers, rather than accessing de-regulated alternatives.”