The Council of Mortgage Lenders has defended lenders’ right to rely solely on oral up front disclosure of fees, terms and conditions after AMI criticised the “unlevel playing field” it created.
The Council of Mortgage Lenders has defended lenders’ right to rely solely on oral up front disclosure of fees, terms and conditions after AMI criticised the “unlevel playing field” it created.
In its quarterly economic bulletin published yesterday the Association of Mortgage Intermediaries highlighted that following the implementation of the Mortgage Credit Directive on 21 March 2016, disclosure rules have changed.
The report said: “Banks and building societies have seen the regulatory onus on them to disclose their terms and conditions and payment structures weaken under MCD – upfront they are permitted under European regulation to disclose orally.
“Under Mortgage Market Review rules they, like intermediaries, had to submit full disclosure to clients before they commenced conversations.”
However in its response to these allegations a spokesman for the CML said: “It isn’t clear to us that there is any lack of level playing field between lenders and intermediaries.
“Under MCOB 4.4A.4 the same rules apply to both. What matters is that borrowers are clear about the scope and nature of the service being offered, whoever it is being offered by, and the rules seem clearly aimed at achieving this objective.”
A spokesman for the Intermediary Mortgage Lenders Association declined to comment.
The AMI report also called on the regulator to address what, in its view, was a weakening of the MMR rules.
The report said: “AMI is disappointed to see that the Financial Conduct Authority has not chosen to require lenders to continue to adopt the same stance as brokers on this point.
“MMR was designed to level the playing field so that borrowers received a consistent level of service regardless of the path they chose to take when applying for a mortgage.
“We strongly urge the FCA to reconsider this rule and revert back to its much fairer and more robust disclosure rules under MMR. This is fairer to consumers on all levels.”
The Financial Conduct Authority declined to comment.
