In a speech to the CML Scotland annual conference, Coogan criticised ‘paternalistic’ European Commission proposals for a directive which would require lenders to provide advice for customers taking out all types of consumer credit agreements. The directive would also apply to consumers drawing down credit under the terms of their loans. This would prevent consumers using one of the key features of a flexible mortgage - the ability to borrow within agreed limits without having to make a new application.
With this regulatory burden, lenders would simply stop offering flexible mortgages, or they would become much more expnsive - and less flexible - for customers in the UK, according to Coogan. “The draft proposal is insulting to UK consumers, would decimate the UK Treasury’s regulatory plans forged after widespread consultation with the industry in the last two years, and would put the industry back in the dark ages,” he said.
“Regulation in Europe should promote competition and consumer protection, not hinder innovation and consumer choice. Flexible mortgages are the way forward; the draft directive on credit for consumers is a significant step backwards.”
