The Council of Mortgage Lenders (CML) said without substantial change, the rules will widen the ‘generational wealth divide’ which already exists, in its submission to the Financial Services Authority’s (FSA) CP10/16 paper on responsible lending handed in today.
“We urgently need a proper public policy debate on how housing finance can help the government deliver its housing policy, and to review whether the risk-averse approach which the FSA has adopted would serve mortgage borrowers or undermine their reasonable aspirations to become home owners,” said CML director general, Michael Coogan.
The CML said it shares the FSA’s vision to “deliver a sustainable market for all participants and which is flexible for consumers”, but believes the policy and rules as drafted will not deliver these outcomes.
The CML urged the government to ensure a proper policy debate, and called on the FSA to take greater account of the market environment and reconsult
on a more proportionate set of rules after a thorough and complete impact analysis.
Coogan said: “Our response puts paid to the myth that lenders simply want to retain the status quo. We fully recognise that regulatory change can help to embed a better mortgage market for the long term – but this particular set of proposals would end up doing more harm than good. We strongly urge both the FSA itself and relevant government Ministers to take stock of all the evidence before proceeding.”
The CP10/16 consultation ends on 16 November. Click here to find the CML’s full response
