25 November 2002

This information is provided courtesy of Law-Now, CMS Cameron McKenna's free on-line information service.

www.law-now.com

Consumer Credit Market

The DTI is currently carrying out a wholesale review of the
Consumer Credit Act 1974 ("the CCA") and has now published
its response to the March 2002 consultation paper on the
review of financial limits and the exemptions of the CCA.

The key changes to be implemented are as follows:

· The current £25,000 upper limit for both credit and hire
agreements regulated by the CCA will be removed.

· The scope of the CCA is to be limited to consumers, sole
traders, unincorporated bodies and partnerships of three or fewer partners.

· The exemptions under the CCA will remain unchanged but will
be reviewed when the proposed exemptions under the revised
Consumer Credit Directive ("CCD") are clearer.

· The position as regards second charge secured loans will remain
unchanged but will be reviewed in 2004 when the FSA takes
over regulation of most mortgages.

Work to make the necessary legislative changes will start
early in 2003

The removal of the upper limit for regulation is not
unexpected - it reflects the proposal in the draft CCD.
The DTI has stated, however, that if the final version of
the CCD applies a limit, their proposal will be adjusted
accordingly.

Other matters raised during the consultation period, such
as the inclusion of charge card agreements within the scope
of the CCA, regulation of second charge loans (it is the
DTI's long-term intention to regulate all second charge
lending) and amendment to the current exemption for
short-term trade credit, are to be reviewed at a later date.

For further information on the DTI response, the ongoing r
eview of UK consumer credit legislation or the draft
Consumer Credit Directive please contact Jean Price by
telephone on +44 (0) 207 367 3353 or by email at
jean.price@cmck.com or Mayoor Patel by telephone on
+44 (0)207 367 2984 or by email at mayoor.patel@cmck.com

=======================================
Disclaimer

CMS Cameron McKenna's principal office is Mitre House,
160 Aldersgate Street London EC1A 4DD. A list of the
partners' names and their qualifications is open for
inspection at that address. The partners are either
solicitors or registered foreign lawyers. We are regulated
by the Law Society.

This information has been prepared for subscribers to
Law-Now - CMS Cameron McKenna's free on-line information
service. The information and opinions expressed in all
Law-Now emails and our website www.law-now.com are not
necessarily comprehensive and do not purport to give
professional advice.

Further information about CMS Cameron McKenna can be found
on our website www.law-now.com
=======================================