Reforming the Consumer Credit Act

Last month we responded to the Treasury’s initial consultation on reforming the Consumer Credit Act 1974 (CCA), which governs the regulation of billions of pounds of lending every year. 

We welcome the opportunity to review the CCA, and agree with the principles behind the reform, which should lead to simpler and more agile regulatory framework for the credit market.  

There is a clear opportunity to use the reform to improve consumer understanding and engagement with credit by updating prescriptive and sometimes outdated communication requirements in the CCA.   

We would also like to see a review of the effectiveness of APR requirements as a tool to show the cost of credit compared to the use of simple pounds and pence. 

As the shape of the reform develops, we would be interested to see more detailed proposals on how it could support product innovation and improved access to credit for excluded customers.  

We agree with the FCA’s Retained Provisions of the CCA Report that there are many important consumer protections in the CCA that cannot be replicated elsewhere in the existing regulatory framework. It is important that consumer protections do not slip between the cracks in the course of this reform.