The review will consider whether particular CCA provisions remain appropriate or should be modified, updated, or replaced by FCA rules or guidance in order to maintain the right degree of consumer protection for today’s market.
Christopher Woolard, Director of Strategy and Competition said:
“This is a real opportunity for everyone with an interest in consumer credit to help us plan our review and to shape the regime. We are looking forward to working with consumer groups, trade bodies, firms and others to help ensure that regulation remains appropriate in a fast-changing market.”
The Call for Input seeks initial views from stakeholders on:
- Whether to prioritise particular provisions for review
- Whether provisions should be considered for earlier review
- How best to engage with stakeholders
Reasons for prioritising provisions for review might include that they provide particular benefits for consumers, or are particularly burdensome on firms without a commensurate benefit, or are particularly complex. Equally, the FCA may decide not to review substantively provisions which are working well or where there is limited flexibility or where FCA rules could not adequately replicate the existing provisions.
The Call for Input will close on 18 May 2016. The FCA will finalise the scope of the review in light of responses and publish an update on progress by Q4 2016.
Notes for editors
- Call for Input: Review of retained provisions of the Consumer Credit Act[1]
- The FCA took over responsibility for regulating consumer credit on 1 April 2014 from the Office of Fair Trading (OFT). As part of the transfer of regulation, Parliament repealed some CCA provisions, and some of these were replaced by FCA rules. The FCA is required to review remaining CCA provisions and to report to HM Treasury by 1 April 2019.
- The report must consider whether the repeal (in whole or part) of CCA provisions would adversely affect the appropriate degree of protection for consumers. The review may also cover other relevant or connected matters. The review must consider which provisions of the CCA could be replaced by FCA rules or guidance, and the principle that a burden or restriction which is imposed in relation to the carrying on of an activity must be proportionate to the benefits. The report may include recommendations to the Treasury, and must be preceded by at least one interim report on which the FCA has consulted.
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In Article 20 of S.I. 2014/366
“20.—(1) The FCA must arrange for—(a) a review of the matter specified in paragraph (2);
(b) the review to result in a report.
(2) The matter is whether the repeal (in whole or in part) of provisions of the Consumer Credit Act 1974 would adversely affect the appropriate degree of protection for consumers.”
“(5) The review must in particular consider—
(a) which provisions of the Consumer Credit Act 1974 could be replaced by rules or guidance made by the FCA under the Financial Services and Markets Act 2000;
(b) the principle that a burden or restriction which is imposed on a person in relation to the carrying on of an activity, should be proportionate to the benefits, considered in general terms, which are expected to result from the imposition of that burden or restriction.” - The FCA has an overarching strategic objective of ensuring the relevant markets function well. To support this it has three operational objectives: to secure an appropriate degree of protection for consumers; to protect and enhance the integrity of the UK financial system; and to promote effective competition in the interests of consumers.
- Find out more information about the FCA.