Stakeholder Notice: August 2008
1. This Notice provides an update on implementation of the Consumer Credit Act 2006 (CCA06). It relates specifically to the draft Legislative Reform (Consumer Credit) Order 2008, post-contract information requirements and the OFT’s consultation on irresponsible lending.
Legislative Reform (Consumer Credit) Order 2008
2. The draft LRO was laid in Parliament on 17 June under the affirmative resolution procedure which allows Parliament a maximum of 40 days scrutiny. It was considered and approved by the Regulatory Reform Committee in the Commons on 8 July and was approved by resolution in the House on 14 July. The Delegated Powers and Regulatory Reform Committee in the Lords considered the LRO at its meeting on 9 July and has reported positively to the House. The Lords debate has been tabled for 8 October (in view of the Committee’s positive report no problems are anticipated but Parliament does have the right to veto an LRO at any stage in the process so final approval is still not a given). However, in anticipation of a positive debate outcome the motion will then tabled on the floor of the House of Lords for final approval. We expect this to happen quite quickly and are therefore planning to make the LRO sometime around 20 October.
3. The draft LRO and the accompanying Explanatory Document (which includes as annexes the final Impact Assessment and the BERR response to the consultation) that were laid in Parliament are available on the BERR website at: www.berr.gov.uk/consumers/consumer-finance/credit-act-2006/documents/index.html
Post-contract information requirements - gone aways and IVAs
4. In May the Minister asked for a paper setting out in detail all the possible options (including “do nothing”) to address the issue of the requirement to send post-contract information to customers who have either “gone away” or agreed an IVA. We expect a decision from the Minister in September. We will issue a further stakeholder notice to update you on the position in due course.
OFT guidance on post-contract transparency requirements under CCA
5. Following the laying in Parliament of the new Consumer Credit (Information Requirements and Duration of Licences and Charges) (Amendment) Regulations 2008, OFT have revised their guidance on the post-contract transparency requirements. This guidance can be found at: www.oft.gov.uk/advice_and_resources/resource_base/legal/cca/Postcontractinfo
OFT consultation on scoping of irresponsible lending project
6. From April this year, the OFT must consider irresponsible lending (which is not defined in the Act) when it assesses fitness to hold a consumer credit licence. On 1 August the OFT launched a consultation on the scope of a project covering the irresponsible lending element of the fitness test introduced by CCA06.
7. The OFT is seeking views and evidence from a range of stakeholders until 24 October when the consultation closes. The OFT press notice and consultation paper can be found at: www.oft.gov.uk/news/press/2008/91-08
Further information on the Consumer Credit Act 2006
8. Either visit the BERR website or email CCA.06@berr.gsi.gov.uk