The European Parliament is debating tweaks to laws that would ban the securitisation of self-cert mortgages.
The EP is today discussing draft Securitisation Regulation laws.
If passed, the current version of the laws would ban lenders in the European Union from securitising mortgages where consumers self-certified income.
The parliament is debating an amendment that would allow lenders to securitise self-cert loans written after the Mortgage Credit Directive came into force in March 2016.
However, this amendment would not affect UK lenders as self-cert was banned in 2014 by the Financial Services Authority.
The laws are expected to come into force by early 2018, and European governments will then work on rolling out their own versions.
The European Parliament wants to bring in the laws to restore confidence to securitisation markets.
These never fully recovered from the reputational damage securitisation got following the 2007 US sub-prime crisis.
The EP wants to clearly differentiate simple securitisation products from more complicated ones.
It is still unclear how Brexit will affect European laws coming into force in the near future.
The FCA has said it will carry on business as usual until the UK leaves Europe.