Overview

The Lending (Regulation) Bill aims to improve transparency and fairness in the consumer credit market. It introduces measures to regulate unsolicited offers of credit, mandates information disclosure about loan repayment consequences, establishes a standard method for calculating interest rates, and defines key terms for clarity.

Description

Unsolicited Credit Offers

Makes it an offence for consumer credit businesses to send unsolicited credit card cheques or increase credit limits without prior customer request. Businesses violating this face fines.

Unsecured Loan Information

Requires lenders to inform borrowers about the implications of the Charging Orders Act 1979, specifically the potential for court-ordered property sales to recover debt. This information must be provided in advertising, conversations, and confirmed in writing by the borrower before loan agreement.

Standardised Interest Rate Calculation

The Secretary of State must create regulations within six months, establishing a standard method for calculating and presenting credit card interest rates. Consultation with relevant organisations is mandatory before regulation implementation.

Interpretation

Defines key terms such as "advertise," "consumer credit business," "credit," "credit card," and others, aligning with definitions in the Consumer Credit Act 1974 for consistency.

Government Spending

The bill doesn't directly specify government spending. The cost of implementing and enforcing the regulations will likely increase government expenditure, though the precise amount is unavailable in the provided text.

Groups Affected

Consumers: Will benefit from increased transparency regarding loan terms and interest calculations, and protection against unsolicited credit offers.

Lenders/Consumer Credit Businesses: Face new regulatory burdens, including information disclosure requirements, standardised interest rate calculations and potential fines for non-compliance.

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