Overview

The Lending (Regulation) Bill aims to increase consumer protection in the lending industry by regulating unsolicited credit offers, ensuring clear information about loan repayment, standardizing interest rate calculations, and defining key terms.

Description

This bill introduces several key measures to regulate lending practices. Firstly, it makes it an offence for lenders to send unsolicited credit card cheques or increase credit limits without customer request. Secondly, lenders offering unsecured loans must inform borrowers about their rights under the Charging Orders Act 1979, specifically the possibility of court-ordered property sales for debt non-payment. This information needs to be included in advertising, conversations, and requires written acknowledgement from the borrower. Thirdly, the bill mandates the Secretary of State to establish a standard method for calculating and displaying interest rates on credit cards within six months of enactment, after consulting relevant parties. Finally, the bill defines key terms used throughout the legislation.

Government Spending

The bill does not directly specify government spending figures. However, the cost of implementing and enforcing the new regulations (including the development of standard interest rate calculation methods and potential enforcement actions) will likely incur some government expense, although no exact figures are provided in the bill itself.

Groups Affected

• Consumers: Will benefit from increased protection against unsolicited credit offers and clearer information about loan repayment terms and potential consequences of default.
• Lenders (Consumer Credit Businesses): Will face new legal obligations regarding unsolicited offers, information provision, and interest rate calculations, potentially incurring costs for compliance.
• The Secretary of State: Responsible for creating regulations for standard interest rate calculations and overseeing enforcement.
• Office of Fair Trading and other relevant organizations: Involved in consultations regarding standard interest rate calculation methods.

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