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Loan industry criticises twin strike at MPPI

The mortgage industry has expressed its disappointment that mortgage payment protection insurance has been referred to the Competition Commission as part of the wider PPI storm.

Both the Council of Mortgage Lenders and Association of Mortgage Intermediaries claim that the MPPI sector is the healthier end of a market that came in for a twin-barrelled assault last week from the FSA and the Office of Fair Trading.

The CML says MPPI gives greater access to stand-alone cover than other sections of PPI and the AMI has also expressed similar views.

CML director general Michael Coogan says: “It is surp-rising that the OFT has dec-ided to include prime MPPI in its proposed referral to the Competition Commission, given that its market study points out differences in terms of greater access to stand-alone cover than in other PPI sectors. However, we will naturally examine the OFT’s reasoning in more detail before responding formally.”

AMI associate director Rob Griffiths says: “We are disappointed that MPPI has been included in the OFT’s proposed referral to the Competition Commission.

“The FSA chose not to include firms that sold regular premium PPI in the prime mortgage sector in its phase 2 work and the OFT itself notes the differences and discusses MPPI separately as it says it appears to operate slightly differently to the other markets.

“We are fully aware that this is an area in which standards need to be raised and have been working with FSA to do this.”

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