Cooling-off period for deals may be on cards
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The European Commission could introduce a 10-day cooling-off period for all mortgage contracts, says the Council of Mortgage Lenders.
In its News & Views newsletter, the CML says the EC is considering replacing the Key Facts Illustration with a European Standardised In-formation Sheet which could in-clude a cooling-off period.
The CML says: “We understand that the EC is considering a compulsory 10-day reflection period after the ESIS is given out for shopping around.
“As the majority of loans in the UK are arranged by brokers, whose job is to shop around for customers across the market, this again adds no value in the UK context.”
It says the EC wants to encourage borrowers to look at loan providers from other countries underpinned by rules about how product infor-mation is presented across Europe.
It adds: “If the ESIS is now made a prescribed requirement across Europe, this will require amend-ments to, or replace, the KFI. 
“This would have significant business costs but no obvious bene-fit to UK consumers as the infor-mation in each is broadly the same although ordered differently.”
The trade body says the European Union could also impose new rules relating to mortgage underwriting. The Financial Stability Board - the international co-ordinating body for national financial regulators and authorities in the interests of financial stability - wants feedback on residential mortgage under-writing practices by October 25.
The CML says: “So we have new rules emerging nationally in the UK, across Europe as a whole, and now apparently also globally on mortgage underwriting.”
It is urging the EC to take a cautious approach in pressing ahead with its proposals.
It says in the UK there are risks of detriment for the industry and borrowers by pursuing national and European regulatory reform at the same time.
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