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Parliamentary Briefing: Consumer Credit Bill
These pages provide a selection of responses to the Consumer Credit Bill by a number of Stakeholder organisations.
Respondees:
I. Nationwide
II. Which?
III. Finance & Leasing Association, APACS and the Council of Mortgage Lenders (joint response)
IV. Direct Marketing Association
Background:
The Government's Consumer Credit Bill is intended to:
- update legislation relating to the licensing of consumer credit businesses.
- provide regulators with more proportionate enforcement powers.
- update controls on extortionate credit bargains with consumers being given better access to dispute resolution.
- remove the financial limit below which regulation currently applies so that all consumer credit is regulated on the same level.
Further:
The existing Consumer Credit Act dates from 1974.
Issue of indebtedness continues to receive extensive attention, despite claims from retailers that consumer spending is slowing.
The Bill's origins lie in the December 2003 white paper, 'Fair, Clear and Competitive - The Consumer Credit Market in the 21st Century'.
This advocated the strengthening of the rules governing credit licences; giving the Office of Fair Trading the power to fine moneylenders and conduct surprise raids on debt companies; the standardisation information when advertising financial products to ensure ease of comparison; and the setting out of fairer rules for people who pay back loans early.
Summation of Responses:
Nationwide:
Calls for
- outlawing of unfair order of payments on credit cards.
- requirement of credit card providers issuing ‘convenience’ cheques to include a clear and transparent ‘health warning’.
- improve transparency around personal loans.
Which?
Welcomes
- the government’s revision of the 1974 Consumer Credit Act as fundamental changes are needed in the market.
- the measures brought in within the bill to tackle extortionate lending.
Is disappointed
- that the government has not gone far enough yet, in tackling the mis-leading and confusing information from the credit industry.
Is calling for
- credit card providers having one way of allocating interest on their cards so that consumers can better use APRs to compare cards.
- full sharing of customers’ full credit history between lenders to ensure responsible lending.
  
Finance & Leasing Association, APACS and the Council of Mortgage Lenders
Supports:
- targeted measures which genuinely promote competitive, transparent and responsive markets, built on responsible lending.
- fostering greater transparency in consumer finance, clauses 6 to 18.
- reducing unnecessary red tape (indefinite standard licenses, for example: clause 34).
- improving consumer redress when things go wrong, with the introduction of the ombudsman scheme: clauses 59 to 61 and Schedule2. the retention of the existing limit for business lending (clause 4) and reform of section 127 of the CCA on the enforceability of contracts (clause 15).
Has concerns about:
- Unfair Relationships.
- Licensing (clauses 23 – 58).
- OFT powers.
- Modernisation of HP law.
- Time scale for Implementation.
- Debt Administration.
Direct Marketing Association
Welcomes
- The publication of the Consumer Credit Bill as reform in this area is long overdue.
Is concerned
- That no unnecessary new regulatory measures are imposed while the industry is still adjusting to the recent changes made to the Advertising and Agreements Regulations.
More information
For more detailed information on these views, click on the links below:
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