Stakeholder Notice March 2008
Stakeholder Notice: March 2008
1. This Notice provides an update on implementation of the Consumer Credit Act 2006 (CCA06). It relates specifically to the Consumer Credit (Information Requirements and Duration of Licences and Charges) Regulations 2007 and the Consumer Credit Appeals Tribunal.
The Consumer Credit (Information Requirements and Duration of Licences and Charges) Regulations 2007
2. These regulations, the majority of whose provisions are due to come into force on 1 October 2008, can be found at: www.legislation.gov.uk/si/si2007/20071167.htm
3. Since the regulations were made in March 2007, stakeholders have raised some concerns about the way in which they work and have asked for some amendments to be made before they come into force. As a consequence of these representations we have decided to take forward some limited amendments
• to correct some drafting errors and
• to ensure that the regulations fully reflect our original policy intentions.
The draft amendment regulations can be found in Related Documents (right)
4. We are not undertaking a formal consultation on these amendment regulations since we have consulted on the policy already - the then DTI consulted on a draft of the regulations in August 2006 and issued a response to the consultation in March 2007. This consultation can be found at: www.berr.gov.uk/consultations/page32774.html
5. Subject to Parliamentary approval we intend that the amendment regulations should come into force on 1 October 2008.
6. The proposed amendments cover the following:
2(a) Regulation 6 removes (in the circumstances mentioned) the requirement in Schedule 1, Part 1 Para 3(h) to show separately, in a fixed-sum credit statement, the amounts of interest which became due during the period to which the statement relates. Paragraph 3(h), however, requires that statement to include not only the amount of interest but also the “date” of any interest becoming due. The amended regulation removes the requirement to set out the date.
2(b)Aligns aggregation provisions for statements in regulation 7 with the aggregation provisions for notices of sums in arrears in regulation 23.
2(c)If the loan agreement provides for interest and charges on the loan to be applied to a separate account from the loan account, Regulation 10 provides that the loan statement should include a form of wording referring to this arrangement. The amendment removes the obligation to show separately the amounts and dates of interest and other charges debited to the servicing account in addition to including a form of words in accordance with that regulation.
2(d) – (g) Clarifies where these provisions are intended to apply in relation to credit cards and clarifies the wording as it applies to overdrafts.
2(h) Corrects the reference to regulation 19(1) in regulation 19(2)c – should be to regulation 19(2)b and amends regulation 19 to provide the same exception for notices of sums in arrears under fixed sum credit agreements as is made in relation to statements in the circumstances set out in regulation 6.
2(i) Permits aggregation of the opening balance in first notices of arrears as is provided for in subsequent notices of arrears
2(j) Deletes regulation 38(2)a as schedule 2 applies only to running account credit.
2(k) Clarifies where pre-commencement arrears may be aggregated
2(l) Corrects the reference to paragraph 8 in Schedule 3 paragraph 10 – should refer to paragraphs 8 and 9.
2(m) Aligns the requirements of Schedule 5 paragraph 6 with the list of advice providers contained in the OFT default information sheet to which it refers.
7. If you have any views on the provisions set out in the draft amendment regulations please send your comments to Sarah.Carlin@berr.gsi.gov.uk by no later than 18 April. Please note that comments should be restricted to the provisions contained in the draft (and that comments not related to these specific provisions will not be considered during this exercise).
Consumer Credit Appeals Tribunal (CCAT)
8. On 6 April, the CCAT will be established, as part of the Ministry of Justice’s Tribunals Service. From this date, appeals under the Consumer Credit Act 1974 (against OFT licensing decisions) will be made to the Tribunals Service rather than BERR (as happens currently).
9. The Consumer Credit Appeals Tribunal Rules, which come into force on 6 April, were laid in Parliament on 11 March and are available at:www.opsi.gov.uk/si/si2008/uksi_20080668_en_1
10. On 18 March the Lord Chancellor announced the appointment of Judge Wulwick as President of the CCAT. Details are in this Ministry of Justice press notice.
Update on Consumer Credit consultations
Section 82
11. On 14 March the Government issued its response to the recent consultation on amending section 82(2A) of the CCA to ensure that any regulated mortgage contract is regulated only under FSMA. The Government laid the relevant secondary legislation in Parliament on 14 March - this will come into force on 6 April 2008.
12. Further information can be found on this Treasury web page
Further information on the Consumer Credit Act 2006
13. Either visit the BERR website or email CCA.06@berr.gsi.gov.uk