Annik Lambert, secretary general of the EMF, which represents mortgage lenders and funders, told a House of Lords Select Sub-Committee taking evidence on the directive that a recent report proposing a complete shift in the directive’s focus was unhelpful with untested ideas.
She said: “Of course, in principal, [consumer protection] is with merit, but it is not the priority. The priority is the regulation of the banks. Consumer protection is not what we should be dealing with right now.
“The proposals from [Spanish MEP] Antolin Sanchez Presedo are not helpful. They will reduce choice and prices will increase, hurting first-time buyers and low income buyers.”
Lambert added: “In the Presedo report, there are a number of provisions that deal with financial stability. They have no place in this directive.
“As long as the initiative remains principle-based, as the original proposals were, it is workable, but it will make it more difficult for borrowers to get a mortgage.”
Indeed, the economic and monetary affairs committee (ECON) that Sanchez Presedo reported for has already drafted 800 amendments, Lambert said, bringing the directive back towards its original approach.
She said: “On the whole, [the ECON compromise] is realistic and workable. It is totally different to Presedo. We have concerns that need discussion, but it is a realistic basis for discussion with the industry and is very close to the Commission’s initial proposal.”
She added that there is no business case at EU level to introduce the directive, but there are member countries where action is needed and it is not being taken.
Lambert said that part of the problem with the proposed directive is that regulation in the UK is going “further and faster” than the EU, potentially leaving Britain at a disadvantage to countries that will see less regulation.
