CML slams mortgage reform without reading the detailsMake Text Bigger
The industry-voice of Britain’s mortgage lenders has already slammed a European Commission proposal to help borrowers before appearing to read the document in detail.
The Council of Mortgage Lenders (CML) claims more moves to protect consumers are unnecessary because the UK already has a highly regulated financial services industry.
The new directive will open up the UK market to lenders from other member states and will offer borrowers a standard comparison tool to make choosing a home loan – including buy to let mortgages – easier.
The move follows implementation of the recent EC directive on credit that manages credit card and personal loan providers and aims to protect consumers against confusing advertising and contracts with unfair terms hidden in the small print.
CML director general Michael Coogan appeared to agree that the organisation had not yet read the proposal when releasing a general press statement.
“We will need to scrutinise the directive thoroughly, as well as the indicative impact analysis published alongside it, before drawing detailed conclusions” he said.
“Even then, it may be difficult to work out the real impacts given that so many areas of the detailed policy will be delegated to the commission to finalise and are not even included in the directive itself at present.”
The directive contains several points to curb lenders misleading borrowers – two of the key recommendations are:
- Stopping lenders from creating false expectations of the availability or cost of loans in advertising
- Letting borrowers compare mortgage conditions and costs from a standardised information sheet
The proposed directive now passes to the European Parliament and the Council of Ministers for consideration.
Internal Market and Services Commissioner Michel Barnier said: “During the boom years, we saw examples of borrowers and lenders acting on the assumption that the good times could not end.
“Lenders and intermediaries alike engaged in irresponsible practices, and consumers were not warned of the consequences of their decisions. The draft set of rules presented today is designed to ensure a high standard of pre-contractual information and improved lending practices across Europe, while promoting a dynamic, competitive and more integrated single market for mortgage credit.”
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