Government Accepts Need For Responsible Lending

The Government has proposed an amendment to the Consumer Credit Bill, which will require 'responsible lending' as part of the Consumer Credit licensing conditions. The Bill, which passed through its third reading in the House of Lords this week, proposes to empower the Office of Fair Trading to monitor irresponsible lending, and where this is found, to provide for fines of up to £50,000 for lenders. Serious cases could result in a consumer credit licence being revoked altogether.

Damon Gibbons, Chair of Debt on our Doorstep welcomed the news:

'We were the first campaigning organisation to raise this issue with the Government and are pleased that they have responded positively with this amendment. Of course, we now need to see the detail from the Office of Fair Trading as to what they will consider to be irresponsible practices, and we would expect early action from them to consult on any proposed guidelines. This comes at an opportune time, as the European Coalition for Responsible Credit will be launched in Brussels at the end of April, and a joint statement on the principles of responsible credit will be issued. That will form the benchmark against which to judge any OFT guidelines.'