Background

On 18 February 2016, the FCA published a Call for Input to review the retained provisions of the Consumer Credit Act (CCA).

When consumer credit regulation moved from the Office of Fair Trading to the FCA on 1 April 2014, a number of CCA provisions were repealed by Parliament and replaced by FCA rules. The FCA must now undertake a review regarding the remaining CCA provisions. The FCA will consider the appropriateness of particular provisions within the CCA and if necessary whether modification, update or replacement by the FCA rules or guidance should take place in order to “maintain the right degree of consumer protection for today’s market”.

Scope

The FCA flags that some retained provisions provide sanctions, such as unenforceability of agreements without a court order, and loss of entitlement to interest and charges. These can be triggered by seemingly innocuous failures in providing statements and notices of sums in arears, amongst other provisions. With the FCA’s stated aim being to simplify and modernise the regime and remove unnecessary or disproportionate burdens, this presents an ideal opportunity for lenders to make representations to the FCA to urge the removal of the current draconian penalties for non-compliance. This would allow firms to focus on treating customers fairly and providing good customer outcomes rather than the prescriptive culture of the previous regime.

A Call for Input

Christopher Woolard, Director of Strategy and Competition, of the FCA has stated:

“This is a real opportunity for everyone with an interest in consumer credit to help us plan our review and to shape the regime.”

The review, due to be reported on 1 April 2019, welcomes comments and views from stakeholders on:

  1. “whether to prioritise particular provisions for review”;
  2. “whether provisions should be considered for earlier review”; and
  3. “how best to engage with stakeholders”.  The Call for Input will remain open until 18 May 2016, with an expectation that the FCA will finalise their scope of review by Q4 2016, taking into account the submissions.