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Mortgages: EU Law

Treasury written question – answered on 14th January 2020.

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Photo of Andrea Jenkyns Andrea Jenkyns Conservative, Morley and Outwood

To ask the Chancellor of the Exchequer, if he will review the mortgage rules related to the EU Mortgage Credit Directive once the UK leaves the EU.

Photo of John Glen John Glen Minister of State (Treasury) (City), The Economic Secretary to the Treasury

After the UK leaves the EU – which the Government is determined to do - we will have control over the rules that we set for our financial services sector. The UK is committed to uphold global, open markets underpinned by the highest standards of regulation and appropriate levels of supervisory oversight.

Common rules will remain in place until the end of the Implementation Period on 31 December 2020. Any EU measures which become operative during that implementation period would therefore also apply in the UK.

The Mortgage Credit Directive (MCD) was introduced by the European Commission following the financial crisis to improve standards for mortgage lending across the EU. The final text of the MCD was published in February 2014, with a requirement for Member States to transpose it into national law by 21 March 2016.

The MCD aims to ensure a high level of consumer protection for mortgage applicants. The majority of its rules already aligned with the existing UK regulatory system for mortgages. For the most part, the Government therefore implemented the requirements through alteration to the Financial Conduct Authority’s (FCA) rules. The FCA monitors the impact of its rules on the market closely. For example, their Mortgages Market Study of March 2019 found that broadly the mortgage market is working well for consumers.

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