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Key vote to decide Europe-wide mortgage regulation delayed

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A key vote to determine the final shape of new Europe-wide mortgage rules has been delayed once again, with voting now set to take place in March.

The plenary sitting at which MEPs were due to vote on the shape of the mortgage credit directive, known in full as the directive on credit agreements relating to residential property, had been due to take place on 10 September initially, although it was delayed until 10 December.

However, the vote has now been delayed again until 12 March because discussions between the European parliament, commission and council had not taken place before 10 December. The final text must be decided by these three bodies before the vote is put to the parliament in March.

The Building Societies Association says the mortgage credit directive has once again been delayed due to a number of other proposals working their way through the European Parliament, like the capital requirements directive.

BSA policy adviser Sharon Chapman says: “Due to the number of higher profile dossiers currently making their way through trilogue negotiations between the commission, the council and the parliament, the timetable for reaching a conclusion on the mortgage directive has been delayed again.

“It remains to be seen whether negotiations will re-commence in the New Year under the Irish presidency, in time to go to the vote in a plenary session of the European parliament during March.”

The European Commission published its consultation paper in March 2011, detailing its vision for the future of mortgage regulation.

The internal markets and consumer protection committee and the economic and monetary affairs committee then made amendments separately, before reaching a final compromise position.The council also reached its own compromise text and the negotiations are now taking place between all parties to agree the final position to put to the vote.

The commission’s original proposals included a requirement for brokers and lenders to issue a European standardised information sheet, to replace the key facts illustration, which would provide key information to the borrower. However, it is not as detailed as the KFI.

The directive was initially meant to cover all loans secured against residential property, but the Imco committee suggested a carve out for loans over €2m in October 2011, while the Econ committee tabled an amendment to exempt buy-to-let transactions in July, following lobbying from UK trade bodies and lenders.


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