Although European legislation will be drawn for mortgages and secured loans in terms of the credit directive, commentators are agreed that it will benefit the UK mortgage market if it is included in a separate paper rather than the main ECCD legislation.
The Directive sets out a number of measures to create a European consumer credit market and the UK government's view on the proposed measures. It invites responses from stakeholders.
Stephen Atkins, managing director of Freedom Finance, explained that if mortgages had fallen under the ECCD, it would have severely restricted the UK mortgage market. “It is not a very sophisticated directive and does not take account the complex and broad products that come out of the UK.
Hopefully, this separate directive for mortgages will pick up a broader market and range of products. It may also pick up products that are not regulated, or these may fall under the main CCD.”
However, Atkins warned that the directive for mortgages and secured loans, expected to be published later in the year, could still put pressure on small firms. He said: “Europe has a tendency to alienate smaller firms and concentrate on big numbers and firms. The one-man bands seem to be sidelined and life could be made difficult for them.”
Chris Cummings, director of AMI, said: “This is extremely good news. If mortgages had been included in the this main consumer directive, we basically would have had to rewrite the MCOB rules.”
Kevin Morgan, managing director of Consilium Financial Planning, commented: “Apart from the UK there are no other countries in Europe that has the culture of having small firms dealing in financial advice. It is worrying that European law could impact on us in a negative way.”
