MMR: CML view

In a statemement, it said: “It is, however, ironic that at the same time as politicians are seeking to encourage lenders to increase their flow of mortgage lending to consumers, they are also keen to take steps to address the perception of "irresponsible lending". While the FSA's discussion paper is well thought out and logical, some of the wider political rhetoric around lending issues continues to seem more conducive to rabble-rousing than to properly considered debate.

“It is interesting to see the FSA note that it believes regulation cannot rely on the notion of borrowers behaving rationally - that is, in their own interests - and that the regulator may instead need to introduce measures to "protect consumers from themselves". It is important that the principle of consumer responsibility is not lost in such a regulatory environment, as it is a basic tenet upon which transactions of all kinds between firms and consumers rely.”

Commenting, Michael Coogan, CML director general, said: "We agree with the FSA that regulation in itself cannot resolve the problems of the recent market. However, we also agree that clearly delineated responsibilities, which remove regulatory ambivalence, will help lenders, intermediaries and consumers to know where they stand, and to accept the consequences of their actions.

"As always with regulatory change, the devil may be in the detail. But we welcome the consultative approach, and look forward to working with the FSA to ensure that the objective of regulatory fairness between lenders, intermediaries and consumers is achieved in practice."