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CML fears Treasury and EC clash on loan rules

The Treasury could be on a collision course with the European Commission over its mortgage regulation proposals, warns the Council of Mortgage Lenders.

In its draft response to the Treasury&#39s Regulating Mort-gages consultation paper, seen by Money Marketing, the CML says “the threats of regulatory uncertainty, duplication and cost extend beyond the UK to encompass Eur-opean developments through the proposed revisions to the consumer credit directive”.

Next month, the EC is set to publish amendments to the 1987 credit directive.

Although the CML does not know what these changes will be, it warns: “We believe this could yet unravel the structure the Treasury is consulting upon, just as the insurance intermediation directive has done.”

The CML is calling on the Government to make an early decision on the impact of the directive to avoid implementing one regime in 2004 and shortly afterwards having to make major changes to the rules.

CML communications manager Bernard Clarke says: “We are flagging up the danger that the European directive may cut across what the Treasury is trying to achieve.”

Charcol senior technical manager Ray Boulger says: “We recognise the Govern-ment has some obligation to the EC but as the UK is not part of the single currency and there is no significant crossborder lending, it is a red herring to compare UK lending with mainland Europe at this point. But, as the need to meet the directive will be in about two to three years, about the same time as FSA regulation comes into play, it makes sense for the CML to flag this up.”

The Treasury says it will not comment on individual responses to its consultation.

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