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EU should leave members to create loan regulation

The European Mortgage Federation says the European Commission should leave individual member states to formulate their own mortgage regulation.

In March, the Commission set out draft rules for a dir-ective on mortgage lending to standardise and improve lending and borrowing practices across member states.

The directive included draft rules on remuneration disclosure, the introduction of a European standardised information sheet to replace the key facts illustration and an outline of the roles both lenders and intermediaries have in assessing whether a potential borrower is creditworthy.

Speaking at the Building Societies Association annual conference in Birmingham last week, European Mortgage Federation senior legal adviser Jennifer Johnson said the EU did not suffer the sort of failings that were seen in the US mortgage market.

She said: “There were cases of irresponsible lending in the EU but what we are at pains to point out at an EU level is that these were very much limited to the fringes of the markets in question and they were certainly not widespread problems.”

Johnson added that any regulatory failings that were discovered are being dealt with by regulators in individual member states.

She said: “This proposal has a responsible lending and borrowing focus and yet we did not experience an irresponsible mortgage lending crisis in the EU.

Where problems were experienced, they are being add-ressed by national regulators and we would argue perhaps that is the appropriate level.”

Your Mortgage Decision director Dominik Lipnicki says: “Clearly, different countries have different challenges and they have different regulatory issues.

“The way that the mortgage market operates in England is different to that of other European countries, so regulation has definitely got to be country-specific.”

Which? says structured deposits are not suitable for the mass market and claims banks are selling the products when simple savings accounts would be more appropriate.

At the Building Societies Association annual conference in Birmingham last week, Which? Money editor James Daley said the consumer champion is concerned about how banks sell structured deposits.

Speaking to Money Marketing, Daley says: “Front-line bank staff are still incentivised to sell products that are unsuitable for clients. We know that as a fact and they are advertising returns that are hardly ever achievable.”

Daley says structured dep-osits should only be sold to customers that have received advice.

He says: “We want to see structured deposits brought into the advised regime.”

Informed Choice managing director Martin Bamford says: “I agree entirely. I think they are very complex products that are often unsuitable for inexperienced investors.

“Where we are seeing the banks selling them en mass as an alternative to savings accounts, it is, in most cases, wholly unsuitable.”


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  1. Uk regulation. EU regulation. Global regulation. Inter-planetary regulation. Universe-wide regulation. Leeches, busy-bodies and red tape producers everywhere. Where will it all end ?

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