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Impose requirements on lenders relating to the calculation of interest rates; to |
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regulate the promotion of lending; and for connected purposes. |
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Be it enacted by the Queen’s most Excellent Majesty, by and with the advice and |
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consent of the Lords Spiritual and Temporal, and Commons, in this present |
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Parliament assembled, and by the authority of the same, as follows:— |
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1 | Unsolicited offers of credit |
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(1) | It is an offence for a consumer credit business to— |
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(a) | send an unsolicited credit card cheque to an individual offering credit; |
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(b) | provide an increase to an existing customer’s credit limit on an |
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(2) | For the avoidance of doubt, no offence is committed under this section if the |
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actions of a consumer credit business are in response to a request or inquiry |
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about its products from an individual. |
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(3) | A consumer credit business guilty of an offence under subsection (1) is liable, |
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on summary conviction, to a fine not exceeding level 3 on the standard scale. |
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2 | Unsecured loans: duty to provide information |
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(1) | A consumer credit business shall have a duty, when offering to provide an |
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unsecured loan, to inform the prospective debtor about the provisions of the |
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Charging Orders Act 1979 (c. 53) relating to the powers of lenders to obtain a |
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court judgement or order relating to the repayment of any outstanding debt. |
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(2) | In particular, the information provided under subsection (1) must specify the |
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powers available to the courts to issue an order of sale in respect of the debtor’s |
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property in the event of the debtor’s failure to make the agreed repayments or |
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to repay the credit when demanded by the creditor. |
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(3) | A consumer credit business must fulfil its duties under this section by— |
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(a) | including such information in any advertising material relating to the |
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(b) | referring to such information in any conversations relating to the loan; |
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(c) | ensuring that no loan is agreed without the debtor providing a written |
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indication that they have understood the information required under |
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(4) | A consumer credit business that does not comply with its duties under this |
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section commits an offence. |
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(5) | A consumer credit business found guilty of an offence under this section shall |
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be liable, on summary conviction, to a fine not exceeding level 3 on the |
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3 | Standard method of calculating interest rates |
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(1) | The Secretary of State must, within six months of this Act coming into force, |
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make regulations providing for a standard method of calculating interest rates |
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on credit cards provided by consumer credit businesses. |
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(2) | Before making regulations under subsection (1) the Secretary of State must |
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(a) | the Office of Fair Trading; |
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(b) | organisations representing consumer credit providers; |
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(c) | organisations representing consumers of financial services; and |
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(d) | any other organisation he considers appropriate. |
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(3) | Regulations made under subsection (1) may make provision about— |
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(a) | the way in which interest rates should be expressed in promotional |
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material, including information relating to the periods in which they |
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(b) | the circumstances in which alternative methods of interest rate |
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calculation may be used; and |
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(c) | penalties for failure to comply with the requirements of the regulations. |
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(4) | Regulations under this section shall be made by statutory instrument. |
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(5) | Regulations under this section are subject to annulment in pursuance of a |
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resolution of either House of Parliament. |
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For the purposes of this Act— |
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“advertise” and “advertising material” shall be construed in accordance |
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with the definition of “advertisement” in the Consumer Credit Act 1974 |
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“consumer credit business” means a consumer credit business as defined |
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in the Consumer Credit Act 1974; |
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“credit” includes a cash loan and any other form of financial |
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“credit card” means a card which is a credit-token within the meaning of |
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section 14(1) of the Consumer Credit Act 1974; |
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“credit card cheque” means a cheque provided by a consumer credit |
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business that is drawn against a consumer’s credit card account; |
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“creditor” means the person providing credit; |
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Lending (Regulation) Bill |
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To Impose requirements on lenders relating to the calculation of interest rates; |
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to regulate the promotion of lending; and for connected purposes. |
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| | | | | | | | | | | | | | | | | | | | | | | | | | | Ordered, by The House of Commons, |
| | | | | to be Printed, 21 January 2009. |
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© Parliamentary copyright House of Commons 2009
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Applications for reproduction should be made in writing to the Information Policy Team,
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Office of Public Sector Information, Kew, Richmond, Surrey TW9 4DU
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PUBLISHED BY AUTHORITY OF THE House of Commons
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LONDON — THE STATIONERY OFFICE LIMITED
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Printed in the United Kingdom by
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The Stationery Office Limited
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