King’s Speech makes no mention of consumer credit reform

Earlier today, on 17 July 2024, King Charles III delivered his King’s Speech setting out the areas of reform for the new Labour Government.

But any consumer credit firms or advisers looking for some mention of reform of the Consumer Credit Act 1974 will be disappointed. There was no mention of such reform either in the King’s Speech, or in the background briefing notes.

It therefore remains to be seen whether there will be any further consultation issued by HM Treasury. The Government’s website simply says that the “consultation has concluded“. No further updates have been added since 11 July 2023. But there is surely a long overdue need for reform: the current system is notoriously complex and often works in a way which does not promote innovation.

Automated Vehicles Act 2024 receives Royal Assent

On 20 May 2024, the Automated Vehicles Act 2024 received Royal Assent. The Act says that it will regulate the use of automated vehicles on roads and other public locations, and introduce provisions on vehicle automation. The UK Government also published a news story.

Some of the key points of the Automated Vehicle Act 2024 are:

– It sets out a scheme of authorisation for automated road vehicles (see Part 1). This includes (a) a system of authorisation (see Chapter 1 of Part 1), (b) licensing of operators for vehicle use without a user-in-charge (see Chapter 2 of Part 1), (c) provisions allowing regulatory bodies to ask for information (see Chapter 3 of Part 1), (d) introducing investigatory powers (see Chapter 4 of Part 1), (e) introducing civil sanctions against regulatory bodies (see Chapter 5 of Part 1) and (f) making other regulatory powers and duties (see Chapter 6 of Part 1).

– It introduces criminal liability for vehicle use (including stop and seize powers an offence of using a vehicle without driver or licenced oversight).

– It gives powers to the Police including stop and seizure powers (see Part 3).

The Act will come into force on a future date. The Secretary of State will need to make a commencement order.

New EU Consumer Credit Directive published

On 30 October 2023, the new EU Consumer Credit Directive (CCD2) was published in the Official Journal of the European Union.

The timeline is:

– CCD2 will come into force on 19 November 2023.

– EU member states must adopt, and publish, the regulatory framework to implement CCD2 by 20 November 2025.

– CCD2 will come into force on 20 November 2026 (and it will repeal the EU Consumer Credit Directive from 2008).

Because the United Kingdom is no longer an EU member state, it will not need to implement it. However, it remains to be seen to what extent any of CCD2 is implemented into UK law to ensure parity with EU law.

Financial Services and Markets Act 2023 receives Royal Assent: impact for consumer credit firms

On 29 June 2023, the Financial Services and Markets Act 2023 received Royal Assent. It is often referred to as being part of the EU ‘bonfire’ legislation. From the date it comes into force, Section 1(1) of the Financial Services and Markets Act 2023 revokes the legislation listed in Schedule 1. This includes a number of provisions which make up the consumer credit regulatory framework.

We’ve been busy at Walker Morris Towers looking into the impact of Section 1(1) of the Financial Services and Markets Act 2023 on consumer credit firms. Here’s our one page summary. If you click on it, you’ll get a bigger version of it.

If anyone needs a PDF copy with the embedded links (shown in the image as underlining), please contact meJeanette Burgess, Leanna Bradshaw or Hasan Siddique.

HM Treasury publishes new amending regulations changing the form and content of default, enforcement and termination notices

On 11 November 2020, HM Treasury laid before Parliament the Consumer Credit (Enforcement, Default and Termination Notices) (Coronavirus) (Amendment) Regulations 2020 and published an explanatory memorandum.

These regulations amend the Consumer Credit (Enforcement, Default and Termination Notices) Regulations 1983, which prescribe the form and content of:

– an enforcement notice under Section 76(1) of the Consumer Credit Act 1974;

– a default notice under Section 87(1) of the Consumer Credit Act 1974; and

– a termination notice under Section 98(1) of the Consumer Credit Act 1974.

These changes make significant changes to the form and content of such notices. The changes come into force on 2 December 2020.

By Regulation 9 of the Consumer Credit (Enforcement, Default and Termination Notices) (Coronavirus) (Amendment) Regulations 2020, there is a transitional period of six months from 2 December 2020 during which time a notice under Sections 76(1), 87(1) or 98(1) of the Consumer Credit Act 1974 will be compliant if it complies with the Consumer Credit (Enforcement, Default and Termination Notices) Regulations 1983 immediately before its amendment on 2 December 2020.

HM Treasury publishes revised draft statutory instrument: the Debt Respite Scheme (Breathing Space Moratorium and Mental Health Crisis Moratorium) (England and Wales) Regulations 2020

Earlier today, on 10 September 2020, HM Treasury published a revised statutory instrument: the Debt Respite Scheme (Breathing Space Moratorium and Mental Health Crisis Moratorium) (England and Wales) Regulations 2020.  This replaces the draft published on 15 July 2020.

You can view the draft revised statutory instrument by clicking here, and view the explanatory memorandum by clicking here and the impact assessment by clicking here.

Goods Mortgages Bill has first reading in the House of Lords

On 5 February 2020, a private members bill, the Goods Mortgages Bill [HL] 2019-2020, had its first reading in the House of Lords. If it becomes law, this bill proposes to abolish the existing laws on bills of sale and create a new system for non-possessory rights.

This is not, of course, the first time such legislation has been suggested. The Law Commission recommended new legislation but Treasury later decided, in May 2018, not to move forward with legislation. A previous private members bill did not progress because Parliament was dissolved in December 2019.

No date has yet to be sent for a second reading.