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CML calls for &#39proportionate and cost-effective&#39 approach

The Council of Mortgage Lenders is urging the Government and the FSA to take a “proportionate and cost-effective” attitude to mortgage regulation rather than merely mirror the rules for investment business.

In its response to the Treasury&#39s Regulating Mortgages consultation paper, the CML says wherever regulation proposes to go further than the existing mortgage code, the CML will “explore fully the rationale for such regulatory creep which has inherent costs for the industry and, ultimately, customers”.

It says the impact of the FSA&#39s proposals in its CP121 review of polarisation is also a major issue. The CML raises the question of whether independent mortgage advisers will have to be remunerated by the defined-payment system and, if so, what this will do to the market for advice.

It asks whether the FSA&#39s proposals for unbundling the cost of advice or marketing from the cost of the product will apply to mortgages.

The CML opposes the Treasury&#39s proposal that an introducer such as an estate agent who refers a potential borrower to a tied agent of a particular lender should be regulated.

Another group which it says should escape regulation are packaging firms which do not liaise with potential borrowers.

Director general Michael Coogan says: “We are continuing to make progress tow-ards the clear, comprehensive and cost-effective regulation customers and lenders need but there is still some way to go.

“We want to help the Trea-sury establish the right framework and are encouraged by their commitment to proportionate and cost-effective regulation.”

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