Currently the Treasury is consulting on whether to give the FPC powers to direct, as opposed to its current powers to recommend.
The CML declared that if the FPC does gain such powers another consultative system should be put in place to keep it in check.
Paul Smee, CML director general, said: “But the market already takes extremely seriously the FPC's powers of recommendation, so we are not sure what powers of direction add.
"If the Treasury does decide to give the FPC these special powers, we think it is crucial that these should be accompanied by an ongoing commitment to proper consultation and communication with those who would be affected by them."
“Given the importance of the £1.3 trillion mortgage market, we recognise that it will inevitably be the sector that potentially bears the brunt of the impact of macro-prudential tools.
“We understand the need to hardwire in a clear understanding of how they would work in future, even though it is clear that no further intervention is needed under current market conditions.”
The CML also wants the FPC to leave the Help to Buy scheme and lending to high-net worth individuals alone.
Meanwhile it advised the FPC to tread carefully when it comes to regulating the buy-to-let market, adding that a major move without consultation could have “unintended consequences”.
The CML also recommended for the Treasury to publish an FPC review into impact and effectiveness of the recently introduced LTI caps in the UK before deciding how to proceed further.