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To: janet.robbins@hm-treasury.gov.uk; public.enquiries@hm-treasury.gov.uk Bcc:
30th December 2009
Dear Ms Robbins
Please can you let me have copies of responses to the consultation on CAT standards for credit cards and basic accounts and also details of the implementation, or not, of the CAT standards, as outlined in the document H M TREASURY STANDARDS FOR RETAIL FINANCIAL PRODUCTS. If there is a formal summary of responses produced by the Treasury then I should like to obtain a copy of this too.
I would also like a list of all companies who met the criteria for the CAT standard on credit cards, also a list of all companies who met the criteria for the CAT standard on Basic Bank accounts, IF any were implemented. I should also like a copy of any Regulatory Impact Assessment report produced in response to the consultation and proposed standards.
There appears to be very little information on the Treasury website since the intial draft CAT standards consultation.
I appreciate your help.
Kind regards
Sharon
Draft CAT standard for credit cards
The passages in square brackets are proposals or options on which the consultation specifically seeks comment.
Comparability
Access
Terms
Penalties:
either to make the minimum payment each month
or to clear the entire balance each month
Customers can select their statement date at no cost at the start of the agreement, and can change the statement date at any time, at a charge of no more than £[10] for each change
[6] months notice of change from CAT standard terms
[30] days notice of varying of other terms, if they adversely affect the customer
The customer may end the agreement at any time, providing all payments have been met
Draft CAT standard for basic bank accounts
Charges
Access
Terms
30th December 2009
Dear Ms Robbins
Please can you let me have copies of responses to the consultation on CAT standards for credit cards and basic accounts and also details of the implementation, or not, of the CAT standards, as outlined in the document H M TREASURY STANDARDS FOR RETAIL FINANCIAL PRODUCTS. If there is a formal summary of responses produced by the Treasury then I should like to obtain a copy of this too.
I would also like a list of all companies who met the criteria for the CAT standard on credit cards, also a list of all companies who met the criteria for the CAT standard on Basic Bank accounts, IF any were implemented. I should also like a copy of any Regulatory Impact Assessment report produced in response to the consultation and proposed standards.
There appears to be very little information on the Treasury website since the intial draft CAT standards consultation.
I appreciate your help.
Kind regards
Sharon
Draft CAT standard for credit cards
The passages in square brackets are proposals or options on which the consultation specifically seeks comment.
Comparability
- All statements must give the following information clearly:
- the annual percentage rate (APR)
- the APR expressed as base rate plus margin
- on what amount of debt interest is charged when the customer pays only part of the outstanding amount
- from what date interest is applied
- all other charges
- No more than one interest rate for cash advances and one interest rate for purchases (the two rates may be the same)
- [The card interest rates must be within [x] percentage points of the base rate] or
- [The interest rates must track any downward movement in the base rate within [28] days of the base rate change or the cardholder must be sent a letter within [28] days of the base rate change setting out the change in the margin].
- No membership fee
- Payments must be applied to the outstanding debt in the following order:
- interest and handling charges;
- cash advances;
- purchases on previous statements, including balance transfers;
- new purchases on the current statement;
- cash advances made, but not yet on the statement;
- purchases made but not yet on the statement.
Access
- No minimum spending limit
- No requirement to buy linked products (eg repayment protection)
- Credit available on the provider's normal terms
Terms
- Information to be in language which is fair, clear, and not misleading
- Deadline for minimum payment to be at least [25] days from statement date, and no interest charged on new items if the balance is paid in full in this period
- The minimum payment required each month to be no more than £[5] or [5]% of the excess amount (whichever is larger)
Penalties:
- for late or incomplete payment to be no more than the minimum balance or £[20] (whichever is larger)
- for exceeding the credit limit to be no more than £[5]
- customers to be informed of the penalty fees at the outset
- Customers can set their credit limits lower than the provider's choice and customers must be informed of this at the outset and whenever the provider proposes to change the credit limit
- Customer is free to pay any amount above the minimum payment of the outstanding balance each month
- Customer must be able to set up direct debit instructions:
either to make the minimum payment each month
or to clear the entire balance each month
Customers can select their statement date at no cost at the start of the agreement, and can change the statement date at any time, at a charge of no more than £[10] for each change
[6] months notice of change from CAT standard terms
[30] days notice of varying of other terms, if they adversely affect the customer
The customer may end the agreement at any time, providing all payments have been met
- If the card is lost or stolen, once the holder informs the provider, the holder will be responsible for no more than [xx] of losses which result from someone else using the card. If the card is used fraudulently without the cardholder's knowledge the holder will be responsible for no more than [xx] of losses which result from someone else using the card
- The user must be told clearly how exchange rates on purchases and advances in foreign currencies are calculated
- For cash advances, the handling charge to be no more than 1.5%
Draft CAT standard for basic bank accounts
Charges
- No one-off or regular charges for everyday transactions.
- No risk of an overdraft.
Access
- No requirement for initial or regular deposits. (Undischarged bankrupts and under sixteen's may be turned down.)
- Account holders must be able to use the following:
- cash machines;
- cash and cheque deposits;
- automated credit transfer;
- direct debit, standing order, or budget accounts.
Terms
- All advertising and paperwork must be straightforward, fair and clear.
- Account holders must be given regular statements, and at least six months notice if the bank can no longer offer a BBA on CAT standard terms.
- Ability to withdraw all funds (see para 9 of notes).
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Comment