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Cable calls for backdating lifetime rules

LibDem Shadow Chancellor Vince Cable has called for home-reversion regulation to be backdated to M-Day or at the very least the point at which the legislation reached Parliament.

Cable is is calling on the Government to rush through the regulations to avoid a gap in consumer protection.

Regulation is scheduled to come into force in 2007 and Treasury Financial Secretary John Healey said this timetable, which includes a 12-week Treasury consultation and six months for the FSA to draw up and consult on the rules, followed by firms applying for permission to sell the plans, needs to be heeded.

Healey said the issue of backdating regulation would be explored by the FSA when it draws up the rules.

Cable asked Healey for clarification on how lifetime mortgage rules would protect consumers from falling into negative equity.

He also asked if the Treasury, in conjunction with the Department for Work and Pensions, would publish a note describing the relationship between the benefit system and equity release, particu- larly regarding means-test- ing, and whether there is a need for reform.

Cable said: “It would give confidence to people in the industry and borrowers, if the Government gives assurance that the protection provided by the new regulation could be backdated.”

Healey said: “Specific matters will be settled during the period when secondary legislation is being made and, in particular, when the FSA draws up proposals for the detailed rules.”

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