Joanne Davis set to expand Locke Lord’s asset finance team as new entrants break into market

Joanne Davis recently joined Locke Lord London office, within its Banking & Finance Department, tasked with heading up the firm’s asset finance, leasing and consumer finance division.

She brought with her a broad-based client portfolio ranging across all three specialisms with the aim of developing new product launches, new business start-ups in the consumer and asset finance sectors as well as growing the firm’s general advisory services in all three sectors.

Prior to joining Locke Lord, Davis spent 10 months as interim head of legal and compliance at Volkswagen Financial Services (VWFS) where she worked at supporting the automotive captive as it tackled its Financial Conduct Authority (FCA) application and implemented all FCA compliance needs ranging from the FCA Handbook, the Consumer Credit Sourcebook, new dealer and broker requirements, financial promotions, corporate governance – as well as its approved persons regime.

“It was a very exciting time,” she said, “and I was also able to assist VWFS with its fleet leasing growth strategy”.

Davis initially joined RBS finance subsidiary, RoyScot, in its law department prior to the company being absorbed into Lombard. Later she moved on to Shoosmiths as head of asset finance & regulatory and in 2011 joined DWF where she headed up the firm’s asset, motor and consumer finance practice in Birmingham.

Growing the firm’s presence

All of which gives her a sound expertise in the way in which captive and independent finance companies operate.

Davis told Asset Finance International that much of her team’s work currently is supporting her long term clients with their FCA implementation as well as developing US banks’ client base in the UK. In addition, she is part of a corporate planning strategy aimed at growing the law firm’s presence throughout mainland Europe.

“Meanwhile,” she stressed, “much time is currently spent assisting the new range of Challenge banks and new entrants as they become established and broaden their financial product ranges. These include Aldermore, Hitachi, Paragon, Maxxia and extends to the peer-to-peer lenders entering the small business lending market.”

The in-depth knowledge required of assets at their point of acquisition, their likely working life-span and their resale value are all crucial lending and leasing criteria which come from trading experience – not, of course, an attribute of new entrants.

Tackling compliance issues

“All new entrants into the asset finance and leasing arena are seeking expertise at assessing assets, as well as impending lease accounting changes and legal and compliance issues affecting their business,” she explained. “Consequently we work with a panel of industry experts, including for example, IAA Advisory and Grant Thornton.”

As the UK economy continues its record of current growth Davis points to the rise in asset replacement with its accompanying increase in asset finance penetration. “The banks are seeking to come back into leasing,” she said, “and at the same time existing and new funders are establishing new rapport with their supporting intermediary broker base.”

Currently, all the major UK banks, lenders and intermediaries have either replaced or made substantial changes to financial incentive schemes, which played such a major role in the mis-selling scandals of recent years.

In its reviews of incentives schemes, the FCA found significant improvements at many firms of all sizes but identified a number of areas common across the industry where further work was needed.

A united viewpoint

Addressing these and other similar issues, such as commission disclosure, has led to a recently formed “compact” between UK banks, lenders and brokers, initiated by Mike Randall of Close Brothers Asset Finance, where a united viewpoint was agreed for the FCA’s Minimum Set of Standards – the variations of activities for regulated business.

As the commissioning lawyer, Davis was responsible for collating all the varying industry views and drafting the first set of Minimum Set of Standards (the second is due later this month).

“The resultant agreement,” she added, “has been aligned with the NACFB (National Association of Commercial Finance Brokers) and FLA’s (Finance & Leasing Association) codes of lending. It is due shortly to be released via the NACFB.”

The asset finance team (including corporate and litigation support) currently consists of three partners, six associates and three lawyers.  The London office is expanding and is looking for partners to join the London office to complement its growth strategy.

New structures and ideas

Looking ahead, Davis is strongly optimistic regarding the immediate future of asset finance and leasing – and for the firm’s expansion into mainland Europe. “The industry has raised the visibility of asset finance as a significant product for business growth,” she said. “Banks that moved away from leasing in the wake of the recession are starting to see it as an important part of their future growth. The amount of new entrants in the market is exciting in itself bringing, as they are, new structures and ideas.

“At the same time the established trade bodies such as the FLA and NACFB, Leaseurope and the Leasing Foundation are all playing their part in increasing the awareness of asset finance and leasing.”

“All of which,” she smiled, “leads on to a greater appetite for specialist leasing to re-emerge once again.”