Government publishes CCA reform consultation response

HM Treasury published its response to the consultation on reform of the Consumer Credit Act (CCA) on 10 July 2023, according to the consultation outcome page¹. The first stage consultation ran from 7:30am on 9 December 2022 to 11:59pm on 17 March 2023¹. The government had announced its intention to reform the CCA on 16 June 2022¹.

The response document, "Reforming the Consumer Credit Act 1974: Consultation Response", runs to 34 pages and carries the reference ISBN 978-1-916693-07-4¹. The outcome page states that it "provides an overview of the feedback to the consultation and outlines the government's proposed next steps"¹.

The original consultation described the CCA 1974 as governing "the regulation surrounding billions of credit card purchases, personal loans and consumer hire agreements made by UK consumers every year"¹. It set out two stated intentions: that reform "will facilitate innovation in the credit sector and increase accessibility of credit products, contributing to growth in the sector and the economy more broadly", and that it is "an opportunity for the government to bolster existing consumer protections to ensure customers remain adequately protected in a modern and increasingly digital economy"¹. The first stage asked stakeholders about the strategic direction of reform, including customer communications, consumer protections, sanctions for firms that do not adhere to regulatory standards, accessibility of credit and financial inclusion¹.

Why it matters for households

The CCA 1974 sets the rules for the credit card purchases, personal loans and consumer hire agreements that UK consumers make, so any change to it touches the terms, paperwork and protections attached to those products¹. The response confirms that reform is proceeding rather than being dropped, but it does not itself change any rule. No new requirements, protections or consumer rights take effect from the 10 July publication; the document reports consultation feedback and proposed next steps¹. The government's stated aims include both making credit products more accessible and bolstering existing consumer protections, and the outcome page does not set out how those aims would be balanced in practice¹. The detail of what could change for borrowers has not been reported at this stage.

What happens next

The government says it will undertake policy development to produce more detailed proposals, "with a view to publishing a second stage consultation in 2024 to seek comment from stakeholders"¹. No date in 2024 has been given, and no further timetable has been reported¹. The consultation page was last updated on 11 July 2023, when the response was added¹.

For background on the proposals and how consultations work, see Reforming the Consumer Credit Act: what could change for borrowers and Consultations and discussion papers: how new rules are made and how to respond.