The AFB and AMI have claimed victory in securing an amendment to the European Consumer Credit Directive which would have banned the payment of commission.
It says that an elevent hour submission from the associations to MEP’s led to the change of the directive.
The Consumer Credit Directive passed its Second Reading in the European Parliament on 16 January. The European Parliament and Commission finally reached a compromise on the Directive that will affect two-thirds of the 490 million European Citizens who use credit to make purchases.
Last year, the European Commission added provisions relating to credit intermediaries that would have considerably restricted consumer choice, harmed the intermediary market and led to consumer detriment.
The original provisions in Article 21 of the Directive would have prohibited consumers from paying intermediaries with a combination of fees and commission.
Lobbying efforts from the AFB and AMI led to last minute amendments being added by the European Parliament, which meant that consumers will continue to have a choice of payment methods as well as increased transparency of remuneration.
AFB director Robert Sinclair says: “This recent success clearly demonstrates the value of a trade body which operates at a European level to protect its members in the UK. If ever conclusive proof were needed as to why supporting the AFB is vital, this is proof positive.
“Had AFB not taken up the challenge of amending the bill, finance brokers in the UK would now be in a situation where by commission was not an option. This would have had a devastating effect on the secured loan industry.”
AMI director Richard Farr adds: “This was an ideal opportunity for our two trade bodies to work in conjunction for the benefit of the broker and mortgage industry. We are grateful to the AFB for identifying the issue and our collected efforts to draft the amendment delivered a positive outcome for mortgage intermediaries and finance brokers alike.”