Consumer Credit Bill

House of Commons

Session 2004 - 05
Internet Publications
Other Bills before Parliament

Consumer Credit Bill

Consumer Credit Bill
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(6)
In this section ‘permitted activity’ means, in relation to a consumer
credit EEA firm, an activity for which the firm has, or could obtain,
permission under paragraph 15 of Schedule 3 to the Financial Services
and Markets Act 2000.”
(6)
In the Table in section 41 of that Act (appeals) in the entry relating to “refusal
5
to make order under section 40(2) in accordance with terms of application”
after “40(2)” insert “, 148(2) or 149(2)”.
(7)
In sections 194(3) and 203(4) of the 2000 Act (powers of intervention and
prohibition) for “(a) to (d) of section 25(2)” substitute “(a) to (e) of section
25(2A)”.
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(8)
In section 203(10) of that Act (definitions relating to Consumer Credit Act
businesses) in the definition of “associate” for “25(2)” substitute “25(2A)”.
(9)
In paragraph 15(3) of Schedule 3 to that Act (EEA passport rights) for “21, 39(1)
and 147(1)” substitute “21 and 39(1)”.
(10)
In paragraph 23 of that Schedule in sub-paragraph (1) for “Sub-paragraph (2)
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applies” substitute “Sub-paragraphs (2) and (2A) apply”.
(11)
In sub-paragraph (2) of that paragraph for “(a) to (d) of section 25(2)” substitute
“(a) to (e) of section 25(2A)”.
(12)
After that sub-paragraph insert—
   “(2A)
The Authority may also exercise its power under section 45 in respect
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of the firm if the Office of Fair Trading has informed the Authority
that it has concerns about any of the following—
(a)
the firm’s skills, knowledge and experience in relation to
Consumer Credit Act businesses;
(b)
such skills, knowledge and experience of other persons who
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are participating in any Consumer Credit Act business being
carried on by the firm;
(c)
practices and procedures that the firm is implementing in
connection with any such business.”
Duration of licences and charges
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Definite and indefinite licences
(1)
In subsection (1) of section 22 of the 1974 Act (definitions of standard and
group licences)—
(a)
in paragraph (a) for “during the prescribed period” substitute “whilst it
is in effect”;
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(b)
in paragraph (b) for the words from “during” to “indefinitely”
substitute “whilst it is in effect”.
(2)
After that subsection insert—
“(1A)
The terms of a licence shall specify—
(a)
whether it has effect indefinitely or only for a limited period;
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and
(b)
if it has effect for a limited period, that period.

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(1B)
For the purposes of subsection (1A)(b) the period specified shall be
such period not exceeding the prescribed period as the OFT thinks fit.
(1C)
A standard licence shall have effect indefinitely unless—
(a)
the application for its issue requests that it have effect for a
limited period only; or
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(b)
the OFT otherwise thinks there is good reason why it should
have effect for such a period only.
(1D)
A group licence shall have effect for a limited period only unless the
OFT thinks there is good reason why it should have effect indefinitely.”
(3)
In section 29 of that Act (renewal of licences)—
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(a)
in subsection (1) after “standard licence” insert “of limited duration”;
(b)
in subsection (4) for “in force” substitute “to have effect”.
(4)
In subsection (1) of section 31 of that Act (compulsory variation of licences)
after “that time” insert “(assuming, in the case of a licence which has effect
indefinitely, that it were a licence of limited duration)”.
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(5)
Before subsection (2) of that section insert—
“(1B)
The OFT shall also proceed as follows if, having regard to section 22(1B)
to (1D), it is of the opinion—
(a)
that a licence which has effect indefinitely should have its
duration limited; or
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(b)
in the case of a licence of limited duration, that the period
during which it has effect should be shortened.”
(6)
In section 32(1) of that Act (suspension and revocation of licences) after “that
time” insert “(assuming, in the case of a licence which has effect indefinitely,
that it were a licence of limited duration)”.
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(7)
In section 35(1)(b) of that Act (particulars to be kept in register maintained by
OFT) for “force” substitute “effect”.
(8)
In section 37 of that Act (circumstances giving rise to termination of a licence)
after subsection (1) insert—
“(1A)
A licence terminates if the licensee gives the OFT a notice under
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subsection (1B).
(1B)
A notice under this subsection shall—
(a)
be in such form as the OFT may by general notice specify;
(b)
contain such information as may be so specified;
(c)
be accompanied by the licence or give reasons as to why it is not
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accompanied by the licence; and
(d)
be signed by or on behalf of the licensee.”
(9)
In subsection (3)(a) of that section after “(1)” insert “or (1A)”.

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Charges for indefinite licences
After section 28 of the 1974 Act insert—
“Charges for indefinite licences
28A
Charges to be paid by licensees etc. before end of payment periods
(1)
The holder of a standard licence which has effect indefinitely shall,
5
before the end of each payment period of his, pay the OFT a charge
towards the costs of carrying out its functions under this Act.
(2)
The original applicant for a group licence which has effect indefinitely
shall, before the end of each payment period of his, pay the OFT such a
charge.
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(3)
The amount of the charge payable by a person under subsection (1) or
(2) before the end of a payment period shall be determined in
accordance with provision which—
(a)
is made by the OFT by general notice; and
(b)
is current on the day which is the prescribed number of days
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before the end of the payment period.
(4)
The provision that may be made by the OFT under subsection (3)
includes—
(a)
different provision in relation to persons of different
descriptions (including persons whose payment periods end at
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different times);
(b)
provision for no charge at all to be payable by persons of
specified descriptions.
(5)
The approval of the Secretary of State and the Treasury is required for
a general notice under subsection (3).
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(6)
For the purposes of this section a person’s payment periods are to be
determined in accordance with provision made by regulations.”
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Extension of period to pay charge for indefinite licence
After section 28A of the 1974 Act (inserted by section 35 of this Act) insert—
“28B
Extension of period to pay charge under s. 28A
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(1)
A person who is required under section 28A to pay a charge before the
end of a period may apply once to the OFT for that period to be
extended.
(2)
The application shall be made no less than the specified number of
working days before the end of that period.
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(3)
If the OFT is satisfied that there is a good reason—
(a)
why the applicant has not paid that charge prior to his making
of the application, and
(b)
why he cannot pay that charge before the end of that period,

it may, if it thinks fit, by notice to him extend that period by such time
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as it thinks fit having regard to that reason.

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(4)
The power of the OFT under this section to extend a period in relation
to a charge—
(a)
includes the power to extend the period in relation to a part of
the charge only;
(b)
may be exercised even though the period has ended.
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(5)
In this section ‘specified’ means specified by the OFT by general
notice.”
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Failure to pay charge for indefinite licence
(1)
After section 28B of the 1974 Act (inserted by section 36 of this Act) insert—
“28C
Failure to pay charge under s. 28A
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(1)
This section applies if a person (the ‘defaulter’) fails to pay a charge—
(a)
before the end of a period (the ‘payment period’) as required
under section 28A; or
(b)
where the payment period is extended under section 28B,
before the end of the payment period as extended (subject to
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subsection (2)).
(2)
Where the payment period is extended under section 28B in relation to
a part of the charge only, this section applies if the defaulter fails—
(a)
to pay so much of the charge as is not covered by the extension
before the end of the payment period disregarding the
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extension; or
(b)
to pay so much of the charge as is covered by the extension
before the end of the payment period as extended.
(3)
Subject to subsection (4), if the charge is a charge under section 28A(1),
the defaulter’s licence terminates.
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(4)
If the defaulter has applied to the OFT under section 28B for the
payment period to be extended and that application has not been
determined—
(a)
his licence shall not terminate before the application has been
determined and the OFT has notified him of the determination;
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and
(b)
if the OFT extends the payment period on that application, this
section shall have effect accordingly.
(5)
If the charge is a charge under section 28A(2), the charge shall be
recoverable by the OFT.”
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(2)
In section 35(1)(b) of that Act (particulars to be kept in register maintained by
OFT) after “revoked” insert “or terminated by section 28C”.