Council of Mortgage Lenders chairman Roger Burden has rubbished Treasury proposals for mortgage regulation, claiming they are “fatally flawed” for failing to include advice.
Speaking at the CML's annual lunch last week, Cheltenham & Gloucester managing director Burden said neither the mortgage industry nor consumers believe the regulatory structure outlined by the Treasury is the right way forward.
He called on Treasury economic secretary Melanie Johnson to at least announce an intention to regulate intermediaries at some point in the future. Burden said a recent CML executive committee survey showed a large majority of members believe the regulation of advice should be statutory.
But if the Treasury continues to rule this out, Burden said members would support advice monitoring under the mortgage code on a voluntary basis for both lenders and intermediaries.
He is urging the FSA to issue detailed draft rules for mortgages before a general election as timetables for regulation have already slipped.
The CML believes mortgage regulation will not take effect until the second half of 2002 rather than January, as the FSA has stated. Burden said a year is needed to ensure that lenders are authorised in time and that the information disclosure regime is in place.
He said: “It is clear that no one, from industry representatives through to consumers, believes the structure announced by the Treasury is the right one. Indeed, many people share the CML's view that it is fatally flawed because it does not encompass intermediaries.”
A Treasury spokesman says: “The Government has made it plain that clear, simple information is the key to consumers making the right decision with the minimum of advice, where advice is needed.”