The Treasury is backing the Council of Mortgage Lenders’ proposals to amend the European mortgage directive.
In its News & Views today, the trade body welcomed the government’s decision to back it over a range of issues.
The trade body says it has the Treasury’s backing in its call for buy-to-let mortgages to be excluded from the directive.
It also opposes the EU’s plans to introduce the European Standardised Information Sheet, replacing the Key Facts Illustration.
The trade body, says: “Introducing the European information sheet in this country would cost borrowers and lenders tens of millions of pounds, yet deliver no obvious benefits to UK consumers.”
The CML says it also has the Treasury’s backing over lenders having to disclose why they have rejected a customer.
The trade body says: “We are particularly concerned about proposed requirements for the lender to explain the logic in automated decision-making processes. This could be difficult to communicate in ways that customers would readily understand. For commercial reasons, lenders are also keen to protect information about automated systems.”
The Treasury accepts that lenders should provide information to applicants but favours removing requirements to provide a detailed explanation.
Concerning the proposal that means lenders would have to offer competitor’s products if they were to offer advised sales.
The CML says: “The Treasury supports retaining consumer choice of advice from a lender or from an intermediary as long as it is clear what range of products is being advised on.”
In 2010 the CML says 49% of all mortgages sold direct by lenders were sold with advice, some 26% of the overall market.