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Labour MP calls for repo crackdown on lenders

Questionable and somewhat arbitrary behaviour of lenders means one regulator should cover secured loans’

A Labour backbencher is calling for better regulation of repossessions to protect vulnerable consumers.

Treasury select committee member George Mudie told Parliament that the recent increase in repossessions along with the “questionable and somewhat arbitrary behaviour of lenders” mean that regulation should be strengthened.

In a bill brought under the 10-minute rule, Mudie called for one regulator to take control of secured loans due to confusion over the current system, where regulation is divided between the FSA and the Office of Fair Trading.

The MP for Leeds East said irresponsible lending should be taken into account when repossessions were sought, as well as the time that the borrower had been in the property and the damaging effects of forced repossession on children.

He said repossession should not take place if there was a given level of equity in the property and regulation should cover the behaviour of local councils in providing alternative housing.

Mudie quoted evidence from the Citizens’ Advice Bureau that some lenders take court action for possession too quickly without regard for good arrears’ practice.

He also attacked the Council for Mortgage Lenders for what he called complacency in its attitude to the rise in repossessions, which grew by 60 per cent last year to 10,250.

Mudie said: “The measures are all designed to strengthen the regulations so that innocent, hard working people who have a temporary setback can be given every opportunity to keep the family home together and, when appropriate and by agreement, make good the default.”

A CML spokesman says: “Our attitude to increased repossessions is not complacent but these figures have to be put into context compared with the highs of the late 1980s and early 1990s.”


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