To achieve minimum disruption in the UK market the CML said there needs to be transitional rules, as it added there is currently no provision for ‘pipeline’ cases.
Paul Smee, CML director general, said: "The directive provides little if any benefit to UK consumers or the operation of the market.
“We believe that both the government and the regulator share this view.
“So, while we naturally recognise the need to comply, we believe that the UK should do so in a pragmatic way that disrupts the existing robust regulatory regime as little as possible."
According to the CML changes to the sales process as it stand will confuse customers, as it said there is no need for a reflection period following a ‘binding offer’, which would add another step in the conveyancing process. To solve the problem the CML said the formal offer should be treated as the binding offer.
The CML said the MCD should apply to new lending only and the FCA should make this explicit, as currently the proposal is confusing and could be taken to apply to contract variations.
It also warned against the disruptive definition of foreign currency loans, as while the CML agreed with the objective of mitigating the risk of currency variation it said ‘the proposals apply too widely’ and ‘the scope should be more narrowly defined’.
