EU credit intermediary study

Chris Cummings - Director General - 8th July 2008 - 10:53

Just a quick post on an area of work that AMI has recently been involved with.  AMI met with the research company who have been charged by the EU Commission to conduct a continental-wide study on the effects of credit intermediaries.  Their definition of Credit Intermediary is very wide not only covering mortgage advisers and IFAs but also retailers through to car dealerships. Pretty much the only form of credit distribution it excludes are packagers!

The reason for the study is twofold.  Firstly, the Commission would like to see if the practices of credit intermediaries have a positive effect on cross border activity, thereby moving closer to the European goal of a single market.  The second reason is to see if there is any potential of an increased chance of consumer detriment with credit being distributed in this way.

AMI has considered long and hard about engaging with this survey as the breadth of its scope concerned us.  However, in the same way as the Commission, the reason for our engagement is twofold.  Other EU member states do not on the whole operate within the high standards of the UK regulatory regime.  If the Commission finds through this study that there are insufficient controls in place for credit intermediation across the board then work would inevitably begin on a new EU directive which would affect us all.  With our own current regulatory burdens this would be unwelcome.  Also with implied consumer detriment we wished to respond, using data from our recent study on the Value of Mortgage Advice clearly showing the significant value and benefits that Mortgage Intermediaries deliver to their client when giving advice.