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Benchmark plan puts Cat among the pigeons

Lenders and brokers are being left in the dark over the extent of Government plans for mortgage regulation.


The industry is bracing itself for more confusion and uncertainty after the Chancellor failed to endorse former telecoms regulator Don Cruickshank&#39s proposals for &#34benchmarked&#34 mortgages published this week.


In his Budget speech, Brown accepted the report&#39s recommendation to encourage the development of a basic bank account for all, but ignored many review recommendations, including bench- marking mortgages, which Cruickshank argues is different from Catmarking.


The banking review report says: &#34The Government should introduce benchmarks for a wide variety of personal consumer products [including mortgages] to facilitate price comparisons. Unlike the current Cat standards, these benchmarks should not specify price caps.&#34


But a Treasury spokesman says: &#34It is not recommending a parallel system to Catmarks but a single benchmark which should not specify price caps.&#34


But the industry does not know if the recommendation involves a parallel system to Catmarks or a modification of Catmarks.


The Council of Mortgage Lenders says the recommendation has &#34put the Cat among the pigeons&#34 as it implies the Government&#39s Cat standards will not go far enough to help confused consumers.


Bradford & Bingley corporate affairs manager Chris Holland says: &#34It could either be fairly helpful or totally confusing. More information does not necessarily mean greater clarification.&#34

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