Amendment of the Mortgage Credit Directive Order 20152

1

The Mortgage Credit Directive Order 2015 M1 is amended as follows.

2

In article 2(1) (interpretation), in the definition of “consumer credit back book mortgage contract”, in sub-paragraph (a)—

a

at the end of paragraph (ii) omit “and”; and

b

after paragraph (ii) insert—

iii

would not be an exempt agreement within the meaning of article 60B(3) of the Regulated Activities Order by virtue of article 60D of that Order (exempt agreements: exemption relating to the purchase of land for non-residential purposes) if it were entered into immediately before 21st March 2016, and

3

In article 27 (transitional provision: person with Part 4A permission to carry on an activity in relation to a regulated mortgage contract before 21st March 2016), in paragraph (1) after “36A,” insert “ 53A, ”.

4

In article 31 (transitional provision: person subject to the Consumer Credit Act 1974 who chooses to adopt new rules before 21st March 2016)—

a

in paragraph (1)(c)—

i

for “the creditor has not” substitute “ neither the creditor nor any credit-broker has ”; and

ii

for “Part 4” substitute “ Part 5 ”;

b

in paragraphs (1)(d) and (2) after “creditor” insert “ or any credit-broker ”; and

c

in paragraph (3) before the definition of “creditor” insert—

“credit-broker” has the meaning given in section 189(1) of the Consumer Credit Act 1974 M2;

5

In Part 2 of Schedule 1 (amendments to secondary legislation), omit paragraph 3 (the Consumer Credit (Agreements) Regulations 1983).

6

In Schedule 2 (requirements for registered consumer buy-to-let mortgage firms), for sub-paragraph (1) of paragraph 14 (foreign currency loans) substitute—

1

Where a borrower enters into a buy-to-let mortgage contract that is a foreign currency loan—

a

either the borrower must have a right to convert the contract into an alternative currency if conditions specified by the creditor are met, or the creditor must put in place other arrangements to limit the exchange risk to which the borrower is exposed under the contract; and

b

if sub-paragraph (4) applies, the creditor must give the borrower, on a regular basis, foreign currency risk warnings.