Written evidence submitted by the Council
of Mortgage Lenders
The CML is the representative trade body for
the UK residential mortgage lending industry. Its 109 members
currently hold around 94% of the assets of the UK mortgage market.
In addition to lending for home ownership, the CML members have
also lent over £138 billion for buy-to-let mortgages to support
a private rental market, and over £60 billion UK-wide for
new-build, repair and improvement to social housing.
We are writing to offer our support to the evidence
submitted today by the British Bankers' Association. We have similar
concerns about the new regulatory structure proposed by the Treasury
and will be submitting a response to their consultation paper
in due course.
In particular, we are concerned about the CPMA
being described as a consumer "champion" and the potential
imbalance between the primary objective of the CPMA (to ensure
confidence in financial services and markets, with a particular
focus on protecting consumers and protecting market integrity)
and its secondary considerations around the principles of good
regulation, the potential impact of policies or regulatory decisions
on consumer and business lending and the need to maintain diversity
in the financial services sector. In our view all these issues
are equally important. Like the BBA we would also prefer to see
a description of a marketplace in which consumers are provided
with clear product information from which they can make informed
choices. This would ensure that consumers themselves have responsibility
for their financial choices.
Whatever the new structure, we believe that
there should be constructive dialogue and interaction between
the prudential regulators and conduct of business regulators.
Changes in conduct of business regulation can have impacts for
prudential regulation and vice versa. This is demonstrated by
the current FSA's mortgage market review which although is aimed
at conduct of business regulation has implications for prudential
regulation. For example, if there are changes in the way new business
is written there may be implications for the back book leaving
lenders exposed to potential prudential risks that were unintended.
22 September 2010