Legal and Regulatory Requirements of Asset Finance
2,000 and 2,500 word length.
Case study scenario:
With several years’ experience as a new business administrator at a small
independent asset finance company, you were successful in applying for a new
position as pay-out supervisor at a bank-owned asset finance company.
Your main responsibility in your new role is to carry out final checks on documentation for all larger transactions (where the net advance exceeds £250,000) prior to them being authorised for pay-out.One of the first cases presented to you relates to a hire purchase agreement with along-established customer of the bank and all documentation has been completed ready for pay-out. However, in the file are a number of copy emails between the customer and your Sales Manager. In one of the emails, the customer asks the Sales Manager what the implicit interest rate is in the agreement and the response is that it is 6%. You check the calculations and find that the correct rate is 6.75%.
1. Explain what action you would take following your discovery of the interest rate discrepancy and analyse how ethics, business culture and personal morality would influence how someone in your position might respond in this scenario.
2. The Finance and Leasing Association’s Business Finance Code contains recommendations to customers taking out business finance agreements. Outline the recommendations and how they might assist those customers in gaining a positive outcome from using asset finance.
3. In relation to fair treatment of customers (FTC), outline the outcomes that the Financial Conduct Authority expects FTC to achieve for consumers and how it expects asset finance companies to apply FTC.