Julian Rose argues that asset finance lenders’ interests may become disparate under the latest UK Trade Associations Review

The Asset Based Finance Association (ABFA), the association for the UK’s factoring and invoice discounting providers, could join the NewTA in a second phase.

The Review reported that the Finance and Leasing Association (FLA), representing asset finance, had made clear it wished to stay independent, as had the Building Societies Association. With ‘close working relationships’ in the short term and ‘more extensive cooperation at a later date’ the Review sounds an optimistic note on how NewTA will work with the FLA.

Surprisingly given that the FLA won’t be joining, the Review still recommends that NewTA will work on asset finance issues as well as factoring and discounting. NewTA will promote and represent the market, manage reputational risk, and oversee and ensure technical expertise and high-quality data.

So if these recommendations are implemented we could be heading towards a situation where asset finance will be represented by both NewTA and the FLA.

Presumably NewTA would represent the interests of banks providing asset finance, leaving the FLA to represent non-bank providers together with banks that decide to join both associations.

Does it all matter?

The British Bankers Association already takes positions on many issues, such as capital requirements, that work for asset finance as much as other lending products. Perhaps the reduced number of associations in the financial sector industry would actually leave the FLA with even more influence than today. It’s not clear and probably won’t be for several years.

All we can say for sure is that these recommendations won’t lead to a single trade body for leasing. Instead NewTA will join the list of other bodies –  the FLA, BVRLA, NACFB, AFPA, Leasing Foundation, Captives Association and others (apologies to any missed) – all helping to ensure the future prosperity of the UK asset finance industry.

Julian Rose is director of consultancy Asset Finance Policy Limited (www.assetfinancepolicy.co.uk) and runs the Asset Finance 500 directory of asset finance brokers (www.assetfinance500.uk)