Oral question asked in the House of Lords, by Lord Davies of Coity (Labour). It was answered on Wednesday, 24 October 2007.

Debt: Consumer Credit

Question: My Lords, the issue of irresponsible lending has been widely canvassed. My concern is that the victims are the ones whose homes are repossessed. Does the Minister believe that the penalties for irresponsible lending are sufficient?

Answer: My Lords, my noble friend is referring to two kinds of lending, one where there is security involved and one where there is no security. On the latter, I referred to action the OFT might take against irresponsible lenders in an earlier answer. As far as mortgages are concerned, the FSA has been doing a lot of work in this area recently. It recently published details of a review into the behaviour of intermediaries and lenders within the sub-prime mortgage market. It discovered weaknesses in responsible lending practices and in firms’ assessments of consumers’ ability to afford a mortgage. As a result it referred five firms to its enforcement division. Potential remedies include withdrawal of their permission to operate and financial penalties.

Secondary information

Type: Oral question
Reference: 695 c1071,1202
Session: 2006-07
Oral question type: Supplementary
Chamber / Committee: House of Lords chamber
Notes: Question originally not printed in Daily Part due to a technical problem. Full question and answer printed as a correction on 25 October 2007 at 695 c1202.
Subjects: Consumers Debts Credit Financial services
Link: View this Oral question on www.publications.parliament.uk