New PayDay Loan watchdog launched by CFA

Last post: May 12, 2013

The FCA shows its teeth with the Payday loan sector.

In order to raise standards in the payday lending industry and to keep players in line, the Consumer Finance Association (CFA) has assembled the Short-Term Lending Compliance Board (SLCB) to enforce the CFA's code of practice and to audit the various payday lending companies. The SLCB is headed by former Banking Code Standards Board chief executive, Seymour Fortescue.  The SLCB will review the CFA code and try to identify any points that are lacking, in order to further protect the consumer.  These findings will then be recommended to authorities for changes to existing regulations. But the board will not be reliant on regulators to sanction non-compliant lenders.  The SLCB may expel these companies from the CFA and even publish the names of these lenders in a shame campaign. Complaints on the payday industry have long been identified and made known to CFA members and these have been documented and acted upon.  The CFA aims to maintain the highest of standards and plans to fully enforce the Code among its members.  Members who cannot abide by the Code and meet these standards better start doing so or end up the pariah or outcast of the industry. Audits on CFA members will be conducted by independent auditors KPMG, but the scope will be defined by the board.  Particular sectors that will be focused on are proper credit appraisal, preventing repetitive borrowing, transparency of charges and the fair treatment of customers in financial difficulties. Fortesque, who also represents the drinks industry as chairman of the Portman Group, will be accompanied on the board by consumer advocate Nick Lord and regulatory specialist Robert Rosenberg.  He promises that the board will have zero tolerance to erring lenders and that the board will use its full powers to keep members up to standards and to provide maximum protection to consumers.