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Re: Financial Services Bill - progresses through Lords.....
Lords Hansard text for 10 Mar 201010 Mar 2010 (pt 0002)
Financial Services Bill
Lord Newby: My Lords, I start by taking up the comments of the noble Lord, Lord Barnett. At one level it is highly amusing that we are wasting all our time today and on Monday debating the first few clauses of a Bill that is likely to collapse during the wash-up.
The bit we are mainly interested in is these amendments (which have yet to be debated think they got up to clause 10 today)
298Insert the following new Clause— "Amendment of the Unfair Terms in Consumer Contract Regulations 1999 In the Unfair Terms in Consumer Contract Regulations 1999 after regulation 6(1), insert— "(1A) Paragraph 2 shall not apply to contracts for the supply of financial services.""
LORD MARLESFORD 302*Insert the following new Clause— "Central register of credit card holders (1) The Treasury shall by order establish a central register of credit card holders. (2) The register shall include the names and addresses of all holders of credit cards issued by UK financial institutions. (3) The register shall be such as to enable a UK financial institution considering issuing a credit card to an applicant (A) to determine— (a) whether A holds a credit card already, (b) the credit limit on any card already held by A, and (c) whether A is aged under 21 at the time of the application. (4) The register shall also record details of any special circumstances which make it permissible under subsection (2) of section (Credit cards: conditions of issue to applicants aged under 21) for more than one credit card to be issued to a person aged under 21. (5) No details of individual financial transactions on any credit card shall be recorded in the register."
303*Insert the following new Clause— "Credit cards: due diligence etc (1) Any person (P) issuing a credit card to an applicant (A) shall do so only having performed due diligence, and having complied with the requirements of sections (Credit cards: conditions of issue) and (Credit cards: conditions of issue to applicants aged under 21). (2) "Due diligence" means having taken the steps in subsections (3) and (4). (3) Step 1 is ascertaining whether A already holds any other credit cards, according to the central register established under section (Central register of credit cards). (4) Step 2 is ascertaining whether A is aged under 21 at the date of application."
304*Insert the following new Clause— "Credit cards: conditions of issue (1) A person (P) issuing a credit card to an applicant (A) shall include in the conditions of use of the card— (a) a requirement that the debt on the card shall be reduced to zero every 6 months, (b) a condition that, in the event of failure to reduce the debt to zero in accordance with paragraph (a), no further credit shall be extended to A, (c) a condition that, in the event of failure by A to make any contractual repayment to P, no further credit shall be extended to A. (2) No debt arising either from failure by A— (a) to reduce a debt to zero, or (b) to make any contractual repayment to P shall be enforceable at law unless P can demonstrate compliance with section (Credit cards: due diligence etc)."
305*Insert the following new Clause— "Credit cards: conditions of issue to applicants aged under 21 (1) Any person (P) issuing a credit card to an applicant (A) where A is aged under 21 shall do so only having verified whether the register established under section (Central register of credit cards) indicates that A already holds a credit card. (2) Where A already holds a credit card P shall not issue a card to A unless P considers that there are specical circumstances which make issuing a card appropriate. (3) Where P issues a card in accordance with subsection (2), the special circumstances shall be recorded in the register established under section (Central register of credit cards)."
(1) The Unfair Terms in Consumer Contract Regulations 1999 (SI 1999/2083) is amended as follows.
(2) After regulation 6(1), insert— "(1A) Paragraph (2) shall not apply to a Relevant Contract. (1B) For the purposes of this section, a Relevant Contract means a contract for the supply of personal current account banking services, and includes all past contracts currently in effect." (3) After regulation 6(2) insert— "(3) In so far as it is in plain and intelligible language, the assessment of fairness of a term in a Relevant Contract shall not relate— (a) to the definition of the main subject matter of the contract, or (b) to the adequacy of the main price or remuneration, as against the goods or services supplied in exchange. (4) When assessing whether a charge falls within the main price or remuneration within the meaning of paragraph (3), account shall be taken of all the relevant circumstances at the time the contract was concluded, including whether the imposition of the charge is contingent on other uncertain events and whether the charge is likely to have been considered by the consumer prior to concluding the contract. (5) Where a term of a contract provides for the charging of a consumer and the circumstances in which that charge can be imposed are not certain to arise during the term of the contract, then such price or remuneration shall not fall within the main price or remuneration for the purposes of paragraph (3). (6) If, for the purposes of paragraph (3), there is doubt about what represents the main price or remuneration, the interpretation which is most favourable to the consumer shall prevail.""
308*Insert the following new Clause— "Restriction on increasing credit limits (1) The Consumer Credit Act 1974 ("the CCA 1974") is amended as follows. (2) After section 51B insert— "51C Restriction on increasing credit limits (1) A person who provides running account credit (the creditor) may not increase the credit limit on a running account credit agreement without the explicit consent of the debtor. (2) A debtor may give consent either orally or in writing, either in a request to the creditor or in response to an offer from the creditor. (3) The Secretary of State may make regulations as to the form and content of any offer to increase a credit limit. (4) A credit limit shall not be increased before the creditor has assessed the affordability and suitability for the debtor. (5) For the purposes of this section "credit limit" has the same meaning as section 10(2). (6) A person who increases a credit limit other than in accordance with this section commits an offence." (3) In Schedule 1 (prosecutions and punishment of offences), after the entry relating to section 51(1) insert—
"51B(5) Breach of restrictions on credit limits a) Summarily The Statutory maximumb) On Indictment A fine" (4) An offence under section 51B of the CAA 1974 is to be treated for the purposes of Part 3 of the Regulatory Enforcement and Sanctions Act 2008 (civil sanctions) as contained in the CCA 1974 immediately before the day on which that Act of 2008 was passed."
Lords Hansard text for 10 Mar 201010 Mar 2010 (pt 0002)
Financial Services Bill
Lord Newby: My Lords, I start by taking up the comments of the noble Lord, Lord Barnett. At one level it is highly amusing that we are wasting all our time today and on Monday debating the first few clauses of a Bill that is likely to collapse during the wash-up.
The bit we are mainly interested in is these amendments (which have yet to be debated think they got up to clause 10 today)
After Clause 26
BARONESS NOAKES
LORD HUNT OF WIRRAL
297Insert the following new Clause— "Store cards and consumer credit agreements (1) The Consumer Credit Act 1974 is amended as follows. (2) After section 60 insert— "60AForm and content of retail credit-token agreements (1) The Secretary of State may make regulations as to the form and content of documents embodying retail credit-token agreements, and the regulations shall contain such provisions as appear to him appropriate including requirements to ensure that— (a) the rate of interest on the credit to be provided under the agreement for credit (or all the rates on a per annum basis where there is more than one rate of interest) does not prejudice the interests of debtors; or (b) the agreement for credit includes a seven day cooling off period during which credit would not be available to the debtor. (2) "Retail credit-token" means a credit-token (which has the meaning given by section 14(1)) which results in the provision of credit under a credit-token agreement provided by a retailer or group of retailers which can only be used for purchases from the retailers concerned. (3) A "retailer" means a person or business providing goods and services to an individual. (4) Accordingly, a "retail credit-token agreement" is a regulated agreement." (3) For section 67 substitute— "67Cancellable agreements (1) A regulated agreement that is not a retail credit-token agreement may be cancelled by the debtor or hirer in accordance with this Part if the antecedent negotiations included oral representations made when in the presence of the debtor or hirer by an individual acting as, or on behalf of, the negotiator, unless— (a) the agreement is secured on land, or is a restricted-use credit agreement to finance the purchase of land or is an agreement for a bridging loan in connection with the purchase of land, or (b) the unexecuted agreement is signed by the debtor or hirer at premises at which any of the following is carrying on any business (whether on a permanent or temporary basis)— (i) the creditor or owner; (ii) any party to a linked transaction (other than the debtor or hirer or a relative of his); (iii) the negotiator in any antecedent negotiations. (2) A retail credit-token agreement may be cancelled by the debtor in accordance with this Part." (4) For section 68 substitute— "68Cooling-off period The debtor or hirer may serve notice of cancellation of a cancellable agreement between his signing of the unexecuted agreement, and— (a) the end of the fifth day following the day on which he received a copy under section 63(2) or a notice under section 64(1)(b), or (b) if (by virtue of regulations made under section 64(4)) section 64(1)(b) does not apply, the end of the fourteenth day following the day on which he signed the unexecuted agreement, or (c) if the cancellable agreement is a retail credit-token agreement, the end of the seventh day following the day on which he signed the unexecuted agreement."" 298Insert the following new Clause— "Amendment of the Unfair Terms in Consumer Contract Regulations 1999 In the Unfair Terms in Consumer Contract Regulations 1999 after regulation 6(1), insert— "(1A) Paragraph 2 shall not apply to contracts for the supply of financial services.""
After Clause 27
LORD WHITTY
301Insert the following new Clause— "Restrictions on appropriation of payments (1) The Consumer Credit Act 1974 ("the CCA 1974") is amended as follows. (2) After section 81(2) insert— "(3) Where a debtor or hirer is liable to make payments in respect of a regulated agreement where more than one interest rate applies, on making a payment in respect of the agreement which is not sufficient to discharge the total amount then due under the agreement, the sums so paid by him shall be appropriated towards the satisfaction of the amounts outstanding in the order of those which bear the highest rate of interest. (4) A consumer credit business who does not act in accord with section 81(3) commits an offence." (3) In Schedule 1 (prosecution and punishment of offences), after the entry relating to section 80(2) insert— "81(4) Breach of restrictions on provisions of credit limit increase. (a) Summarily. (b) On indictment. The statutory maximum. A fine." (4) An offence under section 81(4) of the CCA 1974 is to be treated for the purposes of Part 3 of the Regulatory Enforcement and Sanctions Act 2008 (civil sanctions) as contained in the CCA 1974 immediately before the day on which that Act of 2008 was passed." LORD MARLESFORD
303*Insert the following new Clause— "Credit cards: due diligence etc (1) Any person (P) issuing a credit card to an applicant (A) shall do so only having performed due diligence, and having complied with the requirements of sections (Credit cards: conditions of issue) and (Credit cards: conditions of issue to applicants aged under 21). (2) "Due diligence" means having taken the steps in subsections (3) and (4). (3) Step 1 is ascertaining whether A already holds any other credit cards, according to the central register established under section (Central register of credit cards). (4) Step 2 is ascertaining whether A is aged under 21 at the date of application."
304*Insert the following new Clause— "Credit cards: conditions of issue (1) A person (P) issuing a credit card to an applicant (A) shall include in the conditions of use of the card— (a) a requirement that the debt on the card shall be reduced to zero every 6 months, (b) a condition that, in the event of failure to reduce the debt to zero in accordance with paragraph (a), no further credit shall be extended to A, (c) a condition that, in the event of failure by A to make any contractual repayment to P, no further credit shall be extended to A. (2) No debt arising either from failure by A— (a) to reduce a debt to zero, or (b) to make any contractual repayment to P shall be enforceable at law unless P can demonstrate compliance with section (Credit cards: due diligence etc)."
305*Insert the following new Clause— "Credit cards: conditions of issue to applicants aged under 21 (1) Any person (P) issuing a credit card to an applicant (A) where A is aged under 21 shall do so only having verified whether the register established under section (Central register of credit cards) indicates that A already holds a credit card. (2) Where A already holds a credit card P shall not issue a card to A unless P considers that there are specical circumstances which make issuing a card appropriate. (3) Where P issues a card in accordance with subsection (2), the special circumstances shall be recorded in the register established under section (Central register of credit cards)."
LORD NEWBY
LORD OAKESHOTT OF SEAGROVE BAY
306*Insert the following new Clause— "Other measures to protect consumers (1) A bank must set up arrangements to permit current account customers to draw funds from the account through a network of outlets to be determined by the Secretary of State. (2) In this section "bank" means a UK institution which has permission under Part 4 of the Financial Services and Markets Act 2000 to carry on the regulated activity of accepting deposits (within the means of section 22 of that Act, taken with Schedule 2 and any order under section 22)."LORD NEWBY
LORD OAKESHOTT OF SEAGROVE BAY
BARONESS NOAKES
307*Insert the following new Clause— "Action against unfair unauthorised bank charges (1) The Unfair Terms in Consumer Contract Regulations 1999 (SI 1999/2083) is amended as follows.
(2) After regulation 6(1), insert— "(1A) Paragraph (2) shall not apply to a Relevant Contract. (1B) For the purposes of this section, a Relevant Contract means a contract for the supply of personal current account banking services, and includes all past contracts currently in effect." (3) After regulation 6(2) insert— "(3) In so far as it is in plain and intelligible language, the assessment of fairness of a term in a Relevant Contract shall not relate— (a) to the definition of the main subject matter of the contract, or (b) to the adequacy of the main price or remuneration, as against the goods or services supplied in exchange. (4) When assessing whether a charge falls within the main price or remuneration within the meaning of paragraph (3), account shall be taken of all the relevant circumstances at the time the contract was concluded, including whether the imposition of the charge is contingent on other uncertain events and whether the charge is likely to have been considered by the consumer prior to concluding the contract. (5) Where a term of a contract provides for the charging of a consumer and the circumstances in which that charge can be imposed are not certain to arise during the term of the contract, then such price or remuneration shall not fall within the main price or remuneration for the purposes of paragraph (3). (6) If, for the purposes of paragraph (3), there is doubt about what represents the main price or remuneration, the interpretation which is most favourable to the consumer shall prevail.""
308*Insert the following new Clause— "Restriction on increasing credit limits (1) The Consumer Credit Act 1974 ("the CCA 1974") is amended as follows. (2) After section 51B insert— "51C Restriction on increasing credit limits (1) A person who provides running account credit (the creditor) may not increase the credit limit on a running account credit agreement without the explicit consent of the debtor. (2) A debtor may give consent either orally or in writing, either in a request to the creditor or in response to an offer from the creditor. (3) The Secretary of State may make regulations as to the form and content of any offer to increase a credit limit. (4) A credit limit shall not be increased before the creditor has assessed the affordability and suitability for the debtor. (5) For the purposes of this section "credit limit" has the same meaning as section 10(2). (6) A person who increases a credit limit other than in accordance with this section commits an offence." (3) In Schedule 1 (prosecutions and punishment of offences), after the entry relating to section 51(1) insert—
"51B(5) Breach of restrictions on credit limits a) Summarily The Statutory maximumb) On Indictment A fine" (4) An offence under section 51B of the CAA 1974 is to be treated for the purposes of Part 3 of the Regulatory Enforcement and Sanctions Act 2008 (civil sanctions) as contained in the CCA 1974 immediately before the day on which that Act of 2008 was passed."
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