Review of consumer credit announced
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Issued 4 July 2010
Consumer Affairs Minister Edward Davey has announced that a review of
consumer credit and personal insolvency will be undertaken by the
Government.
The Minister met with the All Party Parliamentary Group on Debt and
Personal Finance, where he announced the review. It will be conducted
jointly with Mark Hoban, the Treasury’s Financial Secretary, and will
cover a number of areas, including:
· How consumers enter into credit
commitments, including the way in which credit is sold and the extent to
which consumers understand what they are committing to;
· What issues arise during the lifetime of a loan from both the
consumer and the lender perspectives; and
· What happens if things go wrong; are the current insolvency
solutions fit for purpose?
The review will be an opportunity for all stakeholders to provide
evidence on what is working well, and where the Government can intervene
to relieve pressures in the system. It is an opportunity to reshape
consumer credit policy and will lead to a full consultation later this
year, or early next year.
Edward Davey said:
“This is an opportunity not only to improve the safeguards on consumer
credit products, where this is necessary. It’s also a chance to cut
unnecessary regulatory burdens, which increase costs and stifle
competition.
“As Consumer Affairs Minister, I want to be sure that people can get
fair deals on credit cards, loans and other products on the market -
improving access for the financially excluded; having an insolvency regime
where those who can, pay, but those who can’t are helped to make a fresh
start; and ensuring a regulatory framework that’s fair to consumers and
creditors alike.”
The Call for Evidence will be issued after the summer recess, which
should lead to a consultation on specific proposals later this year or
early 2011.
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