UK could keep KFI as it clears European hurdle
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The industry looks set to keep the Key Facts Illustration under the European mortgage directive.
On January 25 the first of two committee votes in the European Parliament was held. The Internal Markets and Consumer Protection committee - IMCO - voted on proposals by German MEP Kurt Lechner.
IMCO voted through an amendment to the proposals which means member states may not need to replace the way they present their pre-contractual information - the UK’s being the KFI - with a European Standard Information Sheet.
Under the ruling the UK may instead be allowed to amend the KFI to include additional information.
Robert Sinclair, director of the Association of Mortgage Intermediaries, says: “The vote gives member states flexibility on how they will provide pre-contractual information.”
But he adds that the amendments still need to be approved by a whole host of people before being debated in the European Parliament.
He says: “Although some things have been lost at committee stage it doesn’t mean they won’t be tabled again on the floor of the house.”
IMCO also voted against the proposal to make lenders carry out suitability tests and to disclose why borrowers have been rejected.
But Sinclair says the UK regulator is likely to bring in suitability tests anyway.
The second vote will take place at a later date when the Economic and Monetary Affairs committee - ECON - votes on proposals put forward by Spanish MEP Sanchez Presedo.
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