MCD: The clock is ticking
I very much hope that you had such a relaxing festive break that the title of this has you frowning in faint recognition. MCD? The Merry Christmas Directive? Mistletoe, Crackers and Decorations? Sadly, nothing so seasonal. The Mortgage Credit Directive (aka MCD) is in fact European legislation, effective across the entire EU, which comes into effect on the 21st March 2016.
Whilst the UK has an existing robust regulatory system, this new regulation will impact upon both first and second charge mortgages; the latter of which is currently regulated by the FCA under Consumer Credit permissions. From the above implementation date, firms continuing to offer second charge mortgage loans from the 21st March 2016, will be required to be both authorised by the FCA and hold the correct mortgage permissions. This will affect lenders, administrators and brokers and will bring them into line with their residential counterparts.
If you are unsure whether the Mortgage Credit Directive is applicable to your firm, I’d encourage you to give our MCD helpline a call on 0808 124 0010. The helpline has been designed to provide answers to some of the confusion regarding which business types the MCD is likely to affect. Of course, this advice service is free of charge and will provide you with a definitive answer based on the information you provide. As a rule of thumb, the following types of business will be affected:
- Buy-to-Let (with the exception of consumer buy to let from 21st March 2016)
- Secured credit agreements (second charge firms) the purpose of which is not to acquire or retain the right to residential immovable property
- Bridging loans
However, I would recommend giving us a call to make sure, as a failure to comply – even accidentally - could see you face a steep fine, suspension from trading and even legal action.
There is a solution to all of the issues surrounding the Mortgage Credit Directive, and that is to engage a specialist provider to handle your application and ongoing compliance requirements for you. The Consumer Credit Centre, which is part of the SimplyBiz Group, has a 100% success rate in getting consumer credit applications approved first time by the FCA and it the cost for this service is less than an average two day’s earnings.
The SimplyBiz Group has twelve years of experience in this area and a highly skilled specialist team, and that’s just one of the reasons why AOBP has chosen to partner with us. If you want help with applying for permissions or changing your application date for consumer credit authorisation, please get in touch with us urgently on 01484 443424.