Consumer credit and debt
Consumers are key to a thriving and robust UK economy
The Government wants to ensure that consumer credit markets operate in a way which is fair; protects the most vulnerable in society; encourages sustainable lending and borrowing and does not impose unnecessary burdens on business.
In July 2010 HMT published A New Approach to Financial Regulation which sets out how the UK’s regulatory system is being reformed following the financial crisis. The significant regulatory change outlined in this document has provided us with an opportunity to consider financial services regulation more widely. On 21 December 2010 BIS and HMT published a consultation on whether consumer credit regulation should move from the Office of Fair Trading to the new Consumer Protection and Markets Authority (now to be known as the Financial Conduct Authority). This consultation explores whether transferring consumer credit could create opportunities for simplification and better outcomes for consumers. This consultation closed on 22 March 2011. A summary of consultation responses (PDF, 425 Kb) has now been published. This will be followed by the Government’s policy response later in the year. A new approach to financial regulation: Consultation on reforming the consumer credit regime.
BIS announced a joint BIS/HMT review of the consumer credit and personal insolvency landscape on 13 July 2010. The review is aimed at keeping consumer credit legislation up to date and ensuring that consumer credit rules remain fit for purpose and meet the needs of both lenders and borrowers and are not over-burdensome. The review will cover all aspects of the consumer credit lifecycle from the decision to take out a loan through the lifetime of the loan, including what happens when things go wrong. This is an opportunity to ensure that we have a regulatory framework which is fair to both consumers and the industry. A call for evidence in support of the review was published on 15 October 2010: Managing borrowing and dealing with debt. The Government published a summary of responses (PDF, 333 Kb) on 19 July 2011 and will publish a formal policy response later in the year.
