Article 3 of the MCD had provided some exemptions for such finance however it remained unclear as to what was included.
The Treasury has now moved to clarify the position of bridging finance and equity release and said it aims to maintain the current exemptions seen in UK regulation.
In its latest consultation it said: “Both equity release and bridging loans are already subject to some FCA regulation, and government’s general approach has been to preserve regulation where it already exists.
“This is why these types of lending have not been the focus of the HM Treasury consultation.”
And the Treasury said it was the flexibility of the MCD that allowed it to keep bridging and equity release out of the new regulation.
It said: “The exemptions in the MCD are still beneficial, as they provide the FCA with the flexibility not to apply to these loans the rule changes driven by the MCD.”
The MCD comes into place on March 21 2016.