The Consumer Credit Act, which came into force in 1974 and governs billions of credit card purchases and loans each year, is highly prescriptive and increasingly cumbersome and inflexible – confusing consumers and adding unnecessary costs to businesses when implementing its requirements.

The government will move much of the Act from statute to sit under the Financial Conduct Authority – enabling the regulator to quickly respond to emerging developments in the consumer credit market, rather than having to amend existing legislation. It will also simplify ambiguous technical terms to make clear to consumers what protections they have – and make it easier and more cost effective for businesses to comply with regulation.

The reforms will allow lenders to provide a wider range of finance whilst maintaining important levels of consumer protection. For example, government will ensure that the information a consumer receives throughout the lending process is easy to understand and will be both screen and print-friendly. Legislation will also ensure that lenders are able to easily provide credit for emerging and innovative technologies such as electric cars, helping millions of people embrace technological innovation.

Source: New feed