Just a short post to confirm that the UK government is consulting on its proposed approach to the long overdue reform of the deeply confusing consumer credit regime. This will be done in several phases. And consultation on the first phase ends on 21 July.
Broadly, as with other areas of financial regulation, the government basically proposes to repeal the Consumer Credit Act 1974 and Regulations, bar a few provisions that I guess it could fold into, say, the Financial Services and Markets Act/Orders and FCA Rules.
Phase 1 will focus on removing 'information requirements' and the draconian sanctions or consequences for mistakes, in favour of FCA disclosure rules and supervision.
Phase 2 will look at supplier/creditor liability and unfairness provisions, the different types of credit/hire agreements and other key definitions.
While the government is looking for feedback on the approach, frankly, the whole thing is going to be so hideously complex we may as well just get on with it as proposed. At some point, the new regime will have to factor in the multitude of court decisions, interpretation and unofficial guidance that has grown up over the decades: this will need to be captured in the FCA Handbook (a combination of rules and guidance, anyway); and/or the original language transplanted so as not to create fresh grounds for 'clarifying' litigation.
At any rate, it will be fascinating to see whether the outcome is just as complex as before, albeit everything is in the one set of legislation, orders and rules. That's my bet. It surely can't get much worse... can it?
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