This issue of the VFI News is designed to keep all those operating and interested in vendor finance up to date with the ongoing round of talks between the FBAA Vendor Finance Steering Committee (FBAA VFSC) and various regulatory authorities, consumer groups and influential stakeholders.
Our First Consumer Group Meeting
Peter White, the CEO of the Finance Brokers Association of Australia (FBAA), recently met with the CEO of the Consumer Action Law Centre (CALC), to discuss vendor finance.
CALC expressed major concerns with the current state of the Vendor Finance industry for the following reasons;
- Encouragement of vendor finance transactions with no regulatory framework, i.e. no suitable PI Insurance, no acceptable Code of Conduct and no internal or external Dispute Resolution (IDR or EDR) procedures in place;
- No clear idea as to who has responsibility when things go wrong;
- Concerns around the use of power of attorneys;
- Concerns about property advice and licensing;
- Concerns the VFA is little more than a group that runs networking meetings and is not a professional association.
CALC was however happy to hear more full time/involved professionals in the industry are looking to the FBAA for professional standing. They were supportive of
- The consultative process being undertaken by the FBAA VFSC;
- The availability of the FBAA Vendor Finance PI Insurance policy;
- The fact the FBAA is constructing a Tribunal as part of its Internal Dispute Resolution system that will have determinations made by a barrister and will be made available to members to assist in mediation of their disputes.
- The FBAA’s wish for regular discussions.
That completes the summary of the meeting with CALC. Some FBAA VFSC updates follow.
A Commercial Decision
The FBAA VFSC believe professional vendor finance operators who ‘stand in the middle’, between a Seller and a Buyer, in a credit contract, are going to have to decide just what level of coverage their Seller (the credit provider) may need, with respect to FBAA membership, PI Insurance and EDR membership.
Or will the vendor financier make a commercial decision to use her/his professional memberships/policies to cover the transaction? We believe each vendor financier needs to think these issues through for their business.
- The Vendor Finance section of the FBAA website is currently being built. Specific vendor finance membership details will be available in this section;
- The FBAA has asked its lawyers to write a vendor finance specific Code of Conduct for FBAA Vendor Finance members.
Invitations To Cement Our Professional Standing
- The FBAA VFSC has been invited to write an article for the FBAA’s Finance Professional emagazine, outlining the modern vendor finance Industry in Australia and how strategic alliances with vendor finance professionals can benefit traditional finance professionals.
- The chair of the FBAA VFSC, Felicity Heffernan, has been invited to make a Vendor Finance presentation to the FBAA Annual National Industry Conference, on the Gold Coast on 14th November.