Think integration through, CML urges EU hearing

The European Commission is today holding a hearing in Brussels to listen to the reactions of the European mortgage industry and consumer representatives on proposals for mortgage market integration.  The Council of Mortgage Lenders strongly urges the Commission to concentrate on measures that will make it easier to do business across different member states, not just on measures to harmonise consumer protection.

At the moment, there are many differences in EU mortgage markets.  The most important ones to tackle, to enable lenders to operate in different member states, are the huge variations in access to credit data about borrowers, land registration systems, and mechanisms to take possession of property.  Yet these are not the areas on which the Commission appears to be primarily focusing at present.

The cost-benefit analysis undertaken for the Commission by London Economics indicated that the UK would be the only net "loser" among EU member states from the raft of mooted integration measures.  To make integration worthwhile as far the UK is concerned, the Commission needs to concentrate on funding and market issues at least as much as on consumer aspects.

The CML's Director General, Michael Coogan, is chairing one of the debates at the hearing.  He commented:

"I believe that if integration is going to happen across Europe, it will be driven by lenders' commercial decisions to become more international in their mortgage operations.  Successful integration will not be driven by consumer demand nor by harmonised consumer protection measures.  But, there is an important role for the European Commission to promote measures to improve national and cross-national co-operation on legal and collateral issues.  This should deliver real benefits to lenders and to their customers."

Note to Editors

1.  The CML's members are banks, building societies and other lenders who together undertake around 98% of all residential mortgage lending in the UK. There are 11.6 million mortgages in the UK, with loans worth around £942 billion.

2.  The Green Paper: Mortgage credit in the EU can be found on the European Commission website.

3.  The European Commission's press release on the Green Paper can also be found on their website.

4. Our  Housing Finance article 'Mortgage credit in the EU: the case for integration is not proven' is attached.