CML warns against consumer apathy in the mortgage sector

Date:Thursday 18th November 2010
Author: Max Freedman

The Financial Services Authority (FSA) has been advised by the Council of Mortgage Lenders (CML) that it runs the risk of inspiring consumer apathy if it takes too much responsibility away from the individual.

Director general of the CML Michael Coogan made his remarks after the FSA published its consultation paper on distribution and disclosure in the industry.

He accepted that regulations must allow lenders to assess affordability, but stressed that customers may feel like they have someone to blame for a wrong decision if too much of the power rests with financial institutions.

Mr Coogan said: "The big theme running through the mortgage market review, reflected again in this latest consultation paper, is a shift in the balance of responsibility away from the consumer."

The CML representative questioned whether this is a positive development.

Responding to the same government consultation, the Association of Mortgage Intermediaries "cautiously" welcomed FSA proposals, but called for the regulator to be mindful of their consequences.