COVID-19 – Legislative amendment to section 140A of the Consumer Credit Act 1974
Regulatory Updates | 01/07/20
The legislative amendment to section 140A of the Consumer Credit Act 1974 (CCA) was introduced in the Business and Planning Bill on 30 June 2020. The changes are set out in section 12 of the Bill and relate to the government’s Bounce Back Loan Scheme (BBLS), which was introduced to provide financial support to businesses across the UK affected by the COVID-19 outbreak and that can benefit from £50,000 or less in finance. To enable small businesses to access their loans quickly, earlier this year the Treasury decided to remove BBLS from the scope of the consumer credit regime. Through this legislation the government is now seeking to disapply the unfair relationship provisions under the CCA to BBLS. The section introduces provisions under the CCA removing the powers of the court to make an order under section 140B of the CCA in connection with a credit agreement entered into under the BBLS.