LETTER TO ECONOMIC SECRETARY: Consumer Credit Act – A case for reform
John Glen MP
Economic Secretary to the Treasury
1 Horse Guards Road
London, SW1A 2HQ
Dear Economic Secretary
CONSUMER CREDIT ACT – THE CASE FOR REFORM
Our trade associations represent a wide range of specialist lending companies across the lending and leasing sector.
Modernisation of the Consumer Credit Act (CCA) is urgently needed to simplify procedures to support customers in financial difficulty, notably those impacted by Covid-19, and facilitate access to credit via digital means and to new products, such as low-emission vehicles.
The attached proposals have been developed in collaboration with specialist consumer credit lawyers to identify the areas of the CCA most urgently requiring change.
They are not intended to dilute consumer protections rather they would simplify the regulatory architecture to ensure it is more flexible and enhance rights in some instances, for example, by aligning the rights for subscription-based finance with those for more traditional products.
The FCA review of the CCA which reported to HM Treasury in 2019 provides a solid basis for extensive reform. It is important that its findings are acted upon before they go out of date. The Government has a golden opportunity over the term of this Parliament to create a forward-looking dynamic regulatory framework in a market covering two-thirds of all FCA-regulated firms.
The FCA has the expertise to conduct this exercise in collaboration with you and your officials and we would be willing to provide additional resource as appropriate to support this important work.
We have shared the paper with consumer representatives who agree that improvements need to be made to the Act, particularly in respect of the treatment of customers in financial difficulty. We are certain that we can find common ground in other areas.
As a next step, we would like to invite you to a virtual roundtable discussion (which we will organise) with industry trade bodies and consumer representatives. We would extend this to relevant HMT and FCA officials.