Commission study on regulation of 'non-credit' institutions in mortgage markets

02 December 2008

The study concludes that the legislative and regulatory frameworks differ significantly across the EU creating barriers to the cross-border provision of residential mortgages.

The Commission study prepared by London economics investigates the activities, regulation and supervision of mortgage lenders that are not registered as 'credit institutions' under domestic law. The study concludes that the legislative and regulatory frameworks differ significantly across the EU creating barriers to the cross-border provision of residential mortgages.

 

The study will help the Commission to assess whether there are any regulatory gaps in the supervision of EU mortgage lenders, and whether new measures are needed to address them, Commissioner McCreevy said.

 

In some Member States, such as France or Austria, lenders cannot operate without a banking licence. In other Member States, such as the UK or the Netherlands, they are allowed to grant loans as long as they do not receive deposits from the public. Depending on the Member State where they operate, companies allowed to lend without being licensed as 'credit institutions' fall within different categories. They can be insurance companies, which can grant mortgage loans in 14 countries, subsidiaries of credit institutions, or other companies such as financial institutions.

 

Deadline for comments is 28 February 2009.

 

Press release

Study

 

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