The Internal Market and Consumer Protection Committee (IMCO) voted through its draft Opinion by a large majority on 25 January 2012, sending a strong message to the Economic and Monetary Affairs Committee (ECON) and urging it to take their points on board.
The IMCO position was generally helpful for the UK. In particular they passed an amendment exempting buy-to-let mortgages from scope; recommended that Member States could use an alternative data sheet to the European Standardised Information Sheet (ESIS) thereby allowing continued use of the KFI; lenders would be able to offer advice on their own product range, so long as they disclose to the consumer the scope of products included.
The Council, too, has reached sensible positions on buy-to-let, advice and creditworthiness. But what remains to be seen, is how much of this is reflected in ECON’s final report.
So far, the ECON Rapporteur and his Shadows have been unable to reach agreement, and the vote in committee was postponed (from 25 April). A new date has been set for 8 May, but it remains to be seen if agreement can be reached.
Concerns remain around scope – there is no mention so far of any exemption for buy-to-let; ECON has maintained its position that the ESIS should not be modified; articles still remain covering property valuation, flexibility and arrears, and there is also a proposal to expand the role of the European Banking Authority to develop standards (defining LTV/LTI, and valuation standards).
It is, however, worth noting, that ECON has aligned its position with IMCO and Council, in confirming lenders should be able to provide advice on their own product range.
Trialogue negotiations (between the Commission, Parliament and Council) usually begin almost immediately after the vote in Committee. However, because of the current, heavy workload, there is a strong possibility that negotiations will not begin until September.
Paul Broadhead is head of mortgage policy at the Building Societies Association
