This week saw HM Treasury reject calls to adjust the regulatory perimeter of business lending to cover SME loans with interest rate hedging products.
CML urges FCA to consider targeted deregulation as a potential driver for competition
Responding to the Financial Conduct Authority's "Call for inputs" on competition in the mortgage market, the Council of Mortgage Lenders has urged the FCA to consider whether newly imposed regulation might be hindering competition including innovation, and whether some targeted deregulatory adjustments might potentially help the competitive landscape.
Council of Mortgage Lenders, 21 December 2015
P2P and CIS boundary
SI 2015/2061 which comes into force on 18 January 2016 clarifies the regulatory boundary between peer-to-peer lending (P2P) and collective investment schemes (CIS). The Order provides that a P2P lending platform falling within article 36H of the Regulated Activities Order cannot also be a CIS.
Legislation.gov.uk, 18 December 2015
Regulatory perimeter of business lending
HM Treasury in a letter to the Treasury Select Committee explain that they have considered the regulatory perimeter of business lending in detail. The letter states that HM Treasury have concluded that to adjust the perimeter to cover loans with interest rate hedging products to better protect small and medium sized enterprises (SMEs) would lead to higher lending costs. It would also conflict with Government policy to improve SMEs' access to finance.
HM Treasury, 18 December 2015
HM Treasury consultation on FPC powers of direction in the buy-to-let market
HM Treasury has published a consultation to gather views on how the operation of the UK buy-to-let mortgage market may carry risks to financial stability. Additionally, comments are sought on the granting of further powers of direction through secondary legislation to the Financial Policy Committee (FPC) of the Bank of England. As the FPC itself recommended, it has already been granted powers over residential mortgage lending for owner occupiers in respect of loan to value (LTV) ratios and debt-to-income (DTI) ratios. It is now proposed to grant similar powers of direction in respect of buy-to-let lending, including interest coverage ratios.
HM Treasury, 17 December 2015
CLLS Financial Law Committee responds to Law Commission bills of sale consultation
The Financial Law Committee of the City of London Law Society has published its response to the Law Commission's consultation on bills of sale. The committee sees no benefit to consumers or generally in replacing the current Bill of Sales regime and that the case for change is not made out. It considers that any system that allows finance to be raised on goods already owned where the borrower retains possession should be subject to a substantial minimum value requirement.
City of London Law Society, 17 December 2015
House purchase lending rises 8% in October
The Council of Mortgage Lenders has said first-time buyers borrowed £4.6bn for home-owner house purchases, up 10% on September and October last year.
Council of Mortgage Lenders, 15 December 2015
CML: Gross mortgage lending £19.9 billion in November
The Council of Mortgage Lenders has estimated that gross mortgage lending reached £19.9 billion in November. This is 9% lower than October’ but still 23% higher than last year.
Council of Mortgage Lenders, 17 December 2015
Next edition of InCredit
The next edition of InCredit will be on Tuesday, 12 January 2016.