Tweet
Charities and the Consumer Credit Act
Hi. I am a trustee of a registered charity offering loans to individuals on a case by case basis. Each loan has to have a guarantor and repaid within 5-10 years. The charitable bit comes in with no interest being charged. The recipients are typically people who want to develop careers through education, or people who wish to start a small business. The loans are usually £5-10 K and are judged according to merits and the likelihood of the charity being repaid.
It has been brought to our attention that we may need to register under the consumer credit act. My gut feeling is that because we are a registered charity and we do not charge interest we would not have to register under the consumer credit act. We are giving something for nothing, and that is the loan (something) without interest (nothing) even though the loan has to be paid back.
Is there something authoritative to back up our case that we can rely on?
It has been brought to our attention that we may need to register under the consumer credit act. My gut feeling is that because we are a registered charity and we do not charge interest we would not have to register under the consumer credit act. We are giving something for nothing, and that is the loan (something) without interest (nothing) even though the loan has to be paid back.
Is there something authoritative to back up our case that we can rely on?
Comment