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CML chief warns of gaps in regulation

Council of Mortgage Lenders chairman Andrew Pople is calling for the Government to establish a single regulator for a coherent approach to mortgage regulation.

Speaking at the CML annual lunch in London last week, Pople said there is a potential danger of a gap being created by the FSA regulating first-charge mortgages while the Office of Fair Trading oversees second-charge secured loans.

OFT director general John Vickers, speaking at the lunch, said: “The Government has decided on a separate regulator for first and second-charge mortgages but we will emphasise the importance of an interface between regimes.”

Pople said the need to fill regulatory gaps was a reason for inviting Vickers to speak at the lunch to ensure that a consistent approach is taken.

Vickers confirmed that the OFT would “aim to avoid gaps, overlap and duplication.”

Charcol senior technical manager Ray Boulger says Abbey National managing director retail Pople is “absolutely right as there will be a huge regulatory gap” which could cause “consumer detriment.”

Boulger says homeowners would often be better off remortgaging to raise equity rather than take out a second-charge loan with a high interest rate from a non-Cemap salesperson.

As well as emphasising the CML&#39s ongoing argument for a single regulator, Pople praised the Mortgage Code Compliance Board for being committed to a seamless transition to FSA regulation.

Pople said: “The CML has long argued for a single regulator. There is a need for a joined-up approach to ensure coherent future regulation.”

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