HM Treasury
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Consumer Credit Act consultation opens
HM Treasury and the Department for Business, Enterprise and Regulatory Reform today published a consultation document on proposed changes to the Consumer Credit Act 1974 to prevent the dual regulation of mortgages.
Regulation of Modified Credit Agreements: a consultation asks for views on a proposed change to the Act to ensure that the regulatory regimes of the Financial Services Authority and the Office of Fair Trading for mortgages remain mutually exclusive. The proposed change will provide clarity on the regulatory position and reduce the potential burdens associated with dual regulation.
The Economic Secretary to the Treasury, Kitty Ussher MP said:
"I have been concerned by suggestions that there could be confusing overlap between the FSA and OFT on mortgage regulation, as this would cause difficulties for industry and consumers alike. So today I am launching a consultation that aims to provide greater clarity of regulation for both lenders and borrowers.
"In line with the Government's commitment to open and transparent, principles-based regulation, this proposed change seeks to minimise the regulatory burden on businesses while safeguarding important consumer protections."
Parliamentary Under-Secretary of State for Trade and Consumer Affairs Gareth Thomas MP said:
"These proposals are good for business and good for consumers. We are maintaining the existing levels of protection for borrowers, removing unnecessary burdens on business and ensuring that extra compliance costs are not passed on to consumers."
The consultation closes on 14 February 2008.
NOTES TO EDITORS
1. Following changes to the regulation of consumer credit business as a result of the 2006 Consumer Credit Act, the Government proposed legislation to ensure that the regulatory regimes of the FSA and the OFT for mortgages remain mutually exclusive.
2. The document Regulation of Modified Credit Agreements: a consultation is available at: http://www.hmtreasury.gov.uk/consultations_and_legislation/regulation_credit/consult_regulation_credit.cfm The closing date for responses is 14 February 2008.
3. Consumer credit is regulated by the Consumer Credit Act 1974, which is administered by the Office of Fair Trading (OFT). Following widespread consultation, the Government brought forward legislation to bring the sale and administration of residential first charge mortgages within the scope of the Financial Services Authority (FSA). The FSA took responsibility for this in October 2004.
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