Oxera was commissioned by the Finance and Leasing Association to undertake a Regulatory Impact Assessment of the Department of Trade and Industry’s (DTI) changes to the Consumer Credit Act 1974, proposed in its December 2003 White Paper.
The study focused on the regulatory changes that were most likely to have a significant impact on credit providers and consumers. These included the changes to the extortionate-credit provision, rules on early settlement, and financial limits, with particular attention paid to the impact on securitisation.
Providers envisaged significant costs resulting from the imposition of retrospective changes to the rules. These included the direct costs of making changes to existing agreements and the indirect cost due to the increase in the risk of lending, through the greater uncertainty caused by ex post regulatory intervention.
Oxera surveyed credit providers to collate quantitative evidence on the behavioural response of credit providers and the compliance costs they would incur in implementing the proposed changes to the Act.
The Oxera report was included in the FLA’s response to the DTI White Paper.