The Association of Short-Term Lenders (ASTL) has criticised proposals by the Financial Conduct Authority (FCA) that would enable the regulator to name firms it is investigating at the outset of the investigation.

The trade body for bridging and short-term finance lenders has joined a growing list of voices opposing the regulator’s “name and shame” plans.

As part of its recent CP 24/2 consultation paper, the FCA has proposed identifying firms at the outset of an investigation, using a 'public interest' framework, providing the firm with 24 hours’ notice that it is doing so.

There has already been a significant response to the proposals, with a letter signed by 16 trade associations, including UK Finance and the City of London Corporation, stating the plans would “have an unduly negative impact on the reputation on firms”.

CEO of the ASTL, Vic Jannels, commented: “The ASTL would like to add its voice to the growing number of trade associations and businesses that oppose the name and shame proposals, which were recently announced by the FCA as part of its CP 24/2 consultation paper.

“It’s often the case that an FCA investigation results in the regulator finding nothing untoward with the firm that it is investigating. However, if that firm is named at the outset, it will undoubtedly suffer reputational, and probable commercial, damage while the investigation is taking place and possibly beyond even if it results in no disciplinary action.

“This is a guilty until proven innocent approach that would significantly negatively impact investigated financial services providers and ultimately their customers.”

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