Consultant Zone

Mortgage Credit Directive

It is now a year since the implementation of the Mortgage Market Review (MMR) and whilst we can all point to instances where it appears to have given lenders a backstop reason for declining what appear to be perfectly sensible lending decisions, there is no doubt that it has brought regulation to the forefront of people’s thoughts, both within the lending sector and by the media.

More regulation is on the way too – on the horizon is the implementation of changes to the consumer credit rules, including the Mortgage Credit Directive (MCD).

Although still at consultation stage, the government aim is to finalise the measures needed to implement the directive by March 2016. Input into the consultation needs to be completed by Wednesday 5th May, so if you are an authorised firm with permissions in credit related activities, and want your voice heard, you need to act now.

A major impact of the MCD is the regulation of the second charge lending market to bring it in line with regulation that applies to first charge lenders. The new legislation ought to be a combination of good practises taken from each of the first and second charge lending sectors current activities. But if you want a say in that, get your comments in promptly – see FCA consultation paper CP15/6.

Working with funders, equity shareholders and second charge lenders, we have been helping identify which policies and procedures need to be reviewed to ensure compliance with the ever changing regulatory environment. Learning from past experience, the sooner the new agreed procedures can be embedded, the easier the transition will be.