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Consumer Credit Bill

: It is a pleasure to be locking horns with the Minister again on the Bill. I made my maiden speech on its Second Reading and have followed its progress through the House ever since. As a non-practising solicitor with some background in consumer credit, I have maintained a general interest in its passage. We have heard that many of the Lords amendments are technical, and I would agree with that analysis. Lords amendment No. 1 obviously just changes around the wording of clause 7, and I have no issue whatsoever with that legal drafting point. It was interesting to hear the discussions on Lords amendment No. 2, which will delete wording to ensure that previous judgments cannot act as a bar. The intention behind the Bill has been to try to ensure that there was a retrospective effect regarding the unfairness test. I remain disappointed that we have not gained the clarity that we wanted on the meaning of ““unfairness””, even at this late stage. It is interesting that previous judgments will no longer be a bar on the redress that a creditor may seek due to an unfair relationship. The most interesting amendment is that to clause 29, which returns us to the debate on irresponsible lending. The Minister’s analysis that the provision essentially relates to licensing, and is thus distinct to provisions on the ombudsman or the court, was correct. The unfairness test deals with redress, rather than licensing. However, I wish to follow up a point that I raised with him about the continuing nature of the provision. The clause relates to the determination of whether an applicant is a fit person for a licence. The word ““applicant”” suggests that we are talking about new applicants who want a consumer credit licence from the OFT. My question remains of what will happen when a person has been granted a licence by the OFT, given that clause 29 relates to the issues that the OFT will consider when determining whether to grant a licence. I am aware that other aspects of the Bill, such as clause 38, which will insert proposed new section 33A into the Consumer Credit Act 1974, give the OFT the power to give notice to a licensee for purposes connected with"““addressing the matter with which the OFT is dissatisfied . . . or . . . securing that matters of the same or a similar kind do not arise.””" I want an assurance that the interpretation of clause 38 will mean that the OFT will have the power to address matters in not just the context of new applications that it receives. Clearly, new applicants might not have much of a track record to show whether they satisfy the evidence test on engaging"““in business practices appearing to the OFT to be deceitful or oppressive or otherwise unfair or improper””." Lords amendment No. 3 is effectively further clarification on what those words mean, so irresponsible lending is, in essence, deemed to be a practice that is deceitful, oppressive, or otherwise unfair.