Under the plan, the Asset Based Finance Association could be brought in soon after, while UK Payments Administration and Financial Fraud Action UK would become close partners with new relationships.
The CML announced that its Executive Committee will consider the proposals. In the first quarter of 2016 CML members will decide by vote on whether the CML should become part of the proposed new structure.
The CML said that its objectives will be to ensure that any change in trade body structure would represent an improvement for mortgage lenders; that it would be effective in terms of its services to members; that it would maintain the market coverage that the CML currently has; and that it would be able to act and speak on behalf of a unified industry.
In a statement, the CML said:
"It is for individual lenders to determine the wider implications of the proposals in the round, and their overall attractiveness for their businesses. We look forward to working constructively with the review team as we seek to understand and refine the recommendations in advance of seeking our members’ decision on the proposal."
Ed Richards, who leads the Financial Services Trade Associations Review, said:
“There are real benefits from creating a more unified body to speak for this crucial area of the economy. A new trade association would be able to represent the industry more effectively because its voice would carry greater weight. Having a single point of contact will also be welcomed by policymakers and will reduce duplication of effort.
“However, it’s important that the new association is organised along devolved lines. We need to make sure specialist expertise is preserved and a diverse membership is properly represented while still gaining the advantages from having a bigger organisation.”
The review recommends that the new trade body should establish close working relationships with the Building Societies’ Association and the Finance & Leasing Association and suggests this could lead to more extensive cooperation at a later date.
Other ideas aimed at strengthening the effectiveness of the new body are proposals for specialist committees to address digital innovation, new entrants and new technologies in finance and a committee for the nations and regions to ensure that those based outside London are strongly represented.
The review also recommends setting up two advisory groups to represent the views of consumers and SMEs to the trade association and act, where necessary, as a critical friend. They would be consulted when policies were being developed and meet with the Main Board once a year.
The governance structure for the new organisation proposed by the review would comprise a main board with an independent chairman and below that sector boards with principal responsibility for specific areas.
