FSA proposals are inappropriate, says CML

Date:Tuesday 8th September 2009
Author: Max Freedman

It is inappropriate for the Financial Services Authority (FSA) to propose the restriction of building society lending, according to the Council of Mortgage Lenders (CML).

Bernard Clarke, a spokesperson for the CML, made his comments following the news that the FSA plans on limiting the lending of buy-to-let and high loan-to-value mortgages for those who do not have substantial deposits.

Mr Clarke noted that this action could affect building societies more than other lenders, which he felt was unfair.

He said: "What we want to see is the completion of a mortgage market review. That should shape what would be needed in terms of the future regulation of lenders," he said.

As well as being a burden on the sector, Mr Clarke observed that it could narrow consumer choice if building societies' potential to lend is affected.

Last week, the Building Societies Association said that the FSA proposals would affect its members' ability to compete with banks.