The lenders’ trade body contends the regulator has underestimated the cost of the changes and failed to clearly outline what it plans to do with the data.
In May, the FCA began consulting on proposals to collect more data from lending institutions following the implementation of the Mortgage Market Review.
The CML responded: “With the reporting burden increased to this degree, we believe it is vital that the FCA sets out clearly how it will use this greatly-increased amount of data effectively, so that firms better understand the justification.”
Lenders will be required to report 130 items of data per loan, compared to the current 31, it has estimated, and the cost will be significantly greater than estimated.
It also suggested the data reporting proposals have been set out in such a misleading way that some lenders have asked whether the FCA plans to underwrite each loan again, which is not the case.
A Financial Conduct Authority spokesman said: “We are currently consulting on our proposals so we welcome the views of the industry.
“We’ll be responding in due course, once we’ve had the chance to listen. In the meantime, we are actively speaking to CML and others to get their feedback.”
Data firm AutoRek director Jim Muir said mortgage lenders should be prepared to meet the FCA’s challenge: “Whilst the final requirements have not yet been announced, mortgage lenders should get on the front foot and start preparing information systems so that they can identify relevant data sources and ensure that information can be extracted accurately, consistently and in a timely manner so that robust reports can be prepared and submitted within tight deadlines proving that they have acted in the best interest of consumers.”
