I recently read reports in the press in connection with second-charge needs regulation, says the FSCP.
It would seem to me that, every so often, a few privileged semi-godlike individuals have this urge to wrap the consumer in cotton wool, even though we live in a high-tech, educated, information-transparent society.
It would seem that we must spoonfeed the consumer every time. As a result, we are faced with yet another barrage of regulation.
I agree that the CCA needs to be brought up to date but I do not believe that a complete overhaul is entirely necessary.
Regulation of a second mortgage should not be as heavy-handed because, as I understand it, before any lending can be done, the lender always checks a consumer's ability to repay the loan, that is, affordability. This test is sufficient to let anyone borrow money if they so wish, be it unsecured, secured, second charge or whatever. If there is any regulation to be introduced, it should be the regulation of lenders rather than brokers.
After all, it is the lenders who promote and lend money initially and not the brokers. It could be said that brokers are merely a conduit for their wares, so I believe the CML should consider regulating their members rather than the brokers.
However, I suspect that the CML will eventually recommend that everyone is regulated, including the brokers. Isn't this what happened when the MCCB was initially formed? I should add that clients are made aware of secure borrowings: “Your home is at risk…” etc. If a consumer cannot understand this statement, then I suspect there is no hope for the rest of us. Finally, I should also add that I do not condone borrowing (except for the initial purchase of a house) of any type at all because I believe in the old adage – if you haven't got it, you can't spend it.
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