CML criticises FCA's Mortgage Credit Directive plans

The CML said that a "change of approach" is needed to achieve minimum disruption to the UK mortgage market.

The CML argued that there are insufficient measures to manage the transition to MCD rules. At present, there is no provision for "pipeline" cases, which they said proved crucial in the successful implementation of MMR and should be replicated for the MCD.

They also said that changes to the sales process would confuse customers, as there is no need for a reflection period following a "binding" offer. The CML says that the formal offer should be treated as the binding offer to avoid introducing a new step in the conveyancing process.

The CML also said that the FCA should make explicit that the MCD only applies to new lending. As currently drafted, the proposal is confusing and could be taken to apply to contract variations.

CML director general Paul Smee said:

"The Directive provides little if any benefit to UK consumers or the operation of the market. We believe that both the government and the regulator share this view. So, while we naturally recognise the need to comply, we believe that the UK should do so in a pragmatic way that disrupts the existing robust regulatory regime as little as possible."