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Analysis: MCD – no grace but plenty of favours


In around six months’ time the Mortgage Credit Directive will be active and the expectation is that all intermediary firms will be fully compliant with the new rules.

Whereas many perceived the MMR to be mainly for lenders, with the MCD there are a number of areas where mortgage intermediary firms will have to make changes.

These are key parts of the service provision, including written disclosure, the replacement of the KFI by the ESIS or ‘KFI+’, the removal of transitional provisions for remortgages from other lenders, the alternative finance options and consideration of scope of service.

And the MCD comes with no transitional period for pipeline cases, with a cut-off point of 21 March 2016. Agreements made before this date will not be subject to the MCD. So firms do not get the grace period normally offered by the FCA to get their house in order. The MCD takes immediate effect.

As Ami boss Robert Sinclair recently noted, the smaller broker firms are likely to face the biggest challenges with this next major regulatory upheaval. 

However, that is not to say there is not support and resource to draw on. Many distributors, like Paradigm, are helping firms through the process of compliance.



74% of brokers worried the MCD will impact lending

Almost three quarters (74 per cent) of brokers are worried the Mortgage Credit Directive may impact lending over the next year. A survey of Intermediary Mortgage Lenders Association members and 150 brokers shows 71 per cent of lenders believe lending could be affected. While the changes needed to be made to comply with the MCD […]


Cupis leaves Sesame as board restructures

Sesame Bankhall has announced the departure of its mortgages and wealth management bosses following a restructure of the network’s board. Sesame revealed last week that mortgages managing director John Cupis had left the network. He has joined Openwork as its mortgage director, although his departure date had yet to be decided.  Wealth management managing director […]


Aegon to quit ABI

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Lynda Blackwell FCA

FCA: ‘Lenders increasingly using transitional arrangements’

Lenders are increasingly using the transitional arrangements written into the MMR to stop borrowers becoming trapped, says the FCA. The transitional arrangements have been a hot topic of late and lenders have come under fire for their reluctance to use them. They allow lenders to waive affordability checks for borrowers who may be trapped under […]


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