Thursday, 14 January 2010

Rate cap power for OFT debated in Commons Committee

Rob Marris M.P (Lab, Wolverhampton South West), a member of the House of Commons Committee considering the Financial Services Bill, has put down a proposed amendment to the Bill which would provide the Office of Fair Trading with the power to cap credit charges.

The amendments, which Debt on our Doorstep has helped to draft, provide for the OFT to review credit markets within six months of the Financial Services Bill becoming law to establish the level of price competition and if this is found lacking to impose a cap on the total cost for credit. Lenders who disregarded the cap could be fined or lose their consumer credit licenses.

The amendments are being debated in Committee on 14th January although time for consideration is limited and the issue looks likely to be returned to at the Bill's Report Stage debate in the Commons in the next week. A memorandum of evidence to support the amendments has also been submitted by the Centre for Responsible Credit which is available on
the Bill Committee website