Regulation should not cause unintended and potentially damaging consequences for lenders and their customers, Stephen Sklaroff, director general of the Finance & Leasing Association (FLA) will tell delegates at the FLA Consumer Finance Conference today.

He will tell an expected 100 delegates from the financial services sector – including banks, building societies, credit and store card providers – that the industry is still implementing a huge volume of new regulation created by the last government. This comes at a cost, which can reduce availability and affordability to customers.

Some customers are already finding it hard to get credit in the regulated markets, raising the risk of financial exclusion and, as a result, more frequent recourse to loan sharks.

In April the amount of credit granted by FLA members was 9% lower than in April 2009. the trade body believes financial exclusion could lead to an increase in business for illegal loan sharks.

The FLA says, given the state of the markets, the new government should move cautiously when considering any additional burdens, or changes to the current regulatory architecture.

Sklaroff will say: “If we are to avoid the serious social and economic consequences of a smaller