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Gummer pledge to clean up second-charge loan sector

The Association of Finance Brokers insists it can self-regulate the secured loan market after officially launching last week.

AFB chairman John Gummer, who holds the same role with Aifa and the Association of Mortgage Intermediaries, says the market is capable of getting its own house in order rather than requiring FSA policing.

AFB director-general Chris Cummings said earlier this year that the second-charge loan market needs formal regulation but the organisation’s demand for regulation has since cooled.

Gummer says the AFB is determined to rid the industry of its cowboy image and says the bad boys are unlikely to join the AFB. He says: “The organisation will make sure this is an industry that is looked upon by others as well regulated by itself, so regulation is merely the mechanism by which society as a whole feels satisfied.

“It is self-regulation that will make a difference and that is what we will do by being profitable and by treating customers fairly. If we are not profitable and not responsible, we will not be here in two years.

“It is a bad day for people that think cowboy activity is acceptable and for those that think the job we do is always unacceptable. We want to treat our customers properly as that is what our business is about.”

Meanwhile, prime secured loan provider Picture stresses that a distinction needs to be made between prime and sub-prime lenders.

Marketing director Julia Dallimore says: “It is frustrating that many people believe that all secured lending is sub-prime. In the sub-prime market, interest rates, fees and commission can be high because the risks to the lender are high. Our arrears are very low.”

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