CML pushing for lenders to be able to offer advised sales
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The Council of Mortgage Lenders says it is confident it can overturn the proposal in the European mortgage directive that means lenders will not be able to offer advised sales.
The European Commission’s mortgage market directive says creditors and intermediaries offering an advised service must present a sufficiently wide-ranging analysis of the products on the market.
Speaking at the Countrywide National Property Showcase seminar this morning, Jackie Bennett, head of policy at the CML, told delegates: “It’s really interesting how the directive has tried to tackle advice. The way the directive is currently drafted would make it very difficult for lenders to give advice on their own products because they would have to offer a wide range of products from the market.”
Bennett says it has a lot support for getting this rule redrafted.
She adds: “We are hoping to get that changed.”
Bennett says a lot of what is in the directive will be principles based and the FSA will be able to adopt rules other countries may not.
She says: “A lot of the European directive is principles-based and there are different levels of harmonisation. The EC will look to implement directly across Europe and other bits are for member states to decide how they will implement.
“Please don’t think that because we have a European directive the Financial Services Authority will not be able to go further.”
She says buy-to-let could become regulated under the EC proposals but there is a good chance it will be able to persuade it to not regulate professional landlords.
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Readers' comments (4)
steve mcgill | 19 May 2011 1:27 pm
I thought that this was a fundamental cornerstone of the European directive. The line should be drawn in the sand once and for all. Lenders should NOT be able to give ADVICE unless it is 'whole of market'.
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HW | 19 May 2011 3:44 pm
So Bennett states she has a "lot of support for getting this rule redrafted." I bet a pound to a penny the only 'support' she is receiving if from banks and building societies. God help the public if the CML get their way!
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Anonymous | 20 May 2011 10:06 am
It is ridiculous to say that lenders should only be able to offer advice if they offer whole of market.
Many borrowers will have no idea as to what product they should take if there is a choice of fixed rates, trackers, discounts and so on, despite being just from the lender itself.
This is an important part of the advice process, and clients are familiar with the idea that by going into a lender, they will only be offered that lender's products.....just in the same way that a client of Marks and Spencer does not expect to be able to buy a Primark jumper when they visit that store.
There seem to be a lot of advisers jumping on the bandwagon, saying that Banks do not give advice, and this is a shame, because this is far from reality.
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HW | 20 May 2011 1:05 pm
Anonymous you miss the entire point. Currently banks/building societies provide generic mortgage information plus their own products. How can such a person offer advise when they do not have access or knowledge of the whole market. How many bank advisers would recommend their own products if the whole market was available? Can you really see banks and building societies permiting this?
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