Consumer Credit Deregulation (Hansard, 27 February 1995)

The Minister of State, Department of Trade and Industry (Earl Ferrers)

Our consumer credit legislation provides valuable and necessary consumer protection. That does not mean that it is perfect or unalterable. The Government share the director general's view that, while the basic framework has stood the test of time, some aspects of the legislation need to be changed.

The Government are minded to accept the director general's proposals for changes to the consumer credit legislation. However, the Government have not closed their mind to other options and we shall wish to pay particular attention to further information on the costs and benefits of what has been proposed.

The director general also proposed that some provisions of Section 104 of the Courts and Legal Services Act 1990 should be implemented and the necessary accompanying regulations made. Having considered this carefully, the Government have decided that they should not, at present, bring forward more regulations. However, they will keep the position under review and will reconsider the case for legislation should circumstances change.

The director general also recommended that we should not proceed with previously announced proposals concerned with tightening the rules on the marketing of consumer credit. The Government propose to accept this advice, but in this case also we shall keep the need for additional measures under review.

The director general's report contains many proposals on consumer credit. It is not practicable to bring all of them forward at the same time. We shall give priority to the proposals concerned with excluding lending and hiring to unincorporated businesses from regulation; revising the monetary limits and amounts in the legislation; restricting the statutory obligation to notify the 85WA director general about changes in the officers of businesses operating under standard consumer credit licences or among those in a position to control them; achieving greater fairness in the rebates to be paid if credit agreements are settled early; and with repealing the regulations on quotations. Other consumer credit deregulations measures will be brought forward in due course.

The Government wish to reiterate that the intention is to improve the legislation. By providing for consultation on the basis of detailed proposals, they expect that there will be ample opportunity for representatives of consumer interest, enforcement authorities and the credit industry to contribute to this process.