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Saturday, November 14, 2009

U.K. Mortgage Lenders: Don't Treat Us like "Drug Dealers"

by Calculated Risk on 11/14/2009 08:55:00 AM

This is amusing ...

From the Telegraph: FSA treats mortgage lenders like 'drug dealers', says CML chief

Hitting back at the idea that lenders are “evil” and reckless, [Council of Mortgage Lenders (CML) chief] Matthew Wyles said the industry should be allowed to treat its customers as adults, respecting their right to make their own decisions.

He said: “I have a sneaking suspicion that it’s the way that regulators see consumers – as wanton children who have a tendency to want what isn’t necessarily good for them, and for whom Nanny knows best.

“Increasingly, I also have the feeling that regulators see lenders and intermediaries as the sweetshop owners – or worse, the drug-dealers at the school gates – of the mortgage market, enticing innocent consumers in and then getting them hooked, for their own evil profit-driven purposes.”

Speaking at the CML’s conference, he said the FSA was at risk of creating “the kind of moral hazard it wishes to avoid”, by making consumers feel they need to take no responsibility for their own decisions.

Mr Wyles added that the purpose of regulation should be to provide a sensible operating framework between businesses and their customers.

“It should not attempt to wrap consumers in cotton wool and make borrowing risk-free. That is not the nature of lending, and it is not the nature of borrowing,” he said.
There is nothing in the FSA proposals that would make borrowing "risk-free". That is absurd. And the consumers would still be responsible for all their own decisions.

The proposals are aimed at full disclosure, and to protect consumers from, uh, "drug dealers".