Unregulated loans over £25k 'costing farmers'

http://www.bbc.co.uk/news/uk-wales-33415093

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Financial regulations are out-of-step and have cost some farmers their homes and businesses, a Welsh MP has claimed.

While consumer lenders must comply with multiple checks and legislation, business loans of more than £25,000 are not regulated.

MP for Montgomeryshire Glyn Davies wants the issue debated in parliament.

The UK government said it was wary of introducing new rules, and more regulation would only be considered where there was a clear need.

But Mr Davies told BBC Wales' Week In Week Out programme: "I know of several farmers in Montgomeryshire who have been led down the road of borrowing money, and then borrowing more money to help them deal with the loan, and finishing up with a massive debt that means their farm has to be sold.

"This is unacceptable; this should not be able to happen."

A Treasury spokesman said: "The government aims to strike the right balance between protecting consumers and businesses from abuse and avoiding unnecessary regulatory burdens on lenders that would lead to additional costs for businesses.

"That is why the government created a tough regulator, the Financial Conduct Authority, and gave it strong powers to regulate all loans to consumers, and loans of less than £25,000 to the smallest businesses."

CASE STUDY: Farmer Mary Williams

Last month she and her family were evicted from their home in Cwm Pennant, Snowdonia, which ended five generations of working the land at the Rhwngddwyafon farm.

They had taken out a commercial loan and ended up more than £3m in debt.

"It feels as though I've been hit by a sledgehammer," she said.

"It's like a waste of a lifetime. I put my life into the farm, I don't know anything else and what these people are doing to us is heartbreaking."

Week in Week Out, BBC One Wales, 22:35 BST, Tuesday 7 July 2015