The CML this week advised the Commission to concentrate on removing barriers that discourage lenders from operating in new national markets. It said experience shows a lack of demand for cross-border trade among consumers and little appetite from lenders to operate this way.
Commenting on the European Green Paper, CML director-general Michael Coogan said it is ‘ironic’ that the UK mortgage market is held up as a model for Europe when the Commission’s proposals threaten to seriously undermine it and said the report had seriously underestimated the costs of implementing a European regulatory regime.
In contrast it said there is interest among internationally-active lenders to operate in new markets which would bring in new competition to individual markets, which in turn would benefit consumers. Removing barriers, the report concluded, would open up a wider range of lenders operating within new national markets.
The development comes after Mortgage Introducer last month revealed concerns that the Green Paper could force the FSA to take over regulation of second-charge loans currently overseen by the Consumer Credit Act.
Coogan continued: “The implications for the UK look even worse than they first appeared. We are glad that the Commission is listening to views and we urge it to take practical steps to remove operational barriers rather than pursue theoretical attempts to stimulate cross-border shopping.”
Colin Snowdon, managing director of Freedom Lending, said: “The key is that the EU hasn’t even defined ‘integration’ – how can you have an accurate cost-benefit analysis without first doing this? Pursuing cross-border shopping will add heavily to lenders’ costs and won’t benefit the
UK market at all.”
