In the May 2025 column, Lee Finch considers the future reform of the Consumer Credit Act 1974 (CCA) following the recent consultation paper published by HM Treasury.
The law and regulation surrounding consumer credit is complicated. Consumer credit lending is governed by a legislative labyrinth of interconnected acts (namely the Consumer Credit Act 1974 (CCA)), regulations, FCA principles, rules and guidance and, some may say, the Financial Ombudsman Service’s (FOS) flights of fancy. Reform has been long mooted and is long overdue.
Over the past 15 years, progress has been made. For example:
- The FCA’s report following its review of retained provisions of the CCA, which was published in March 2019 (see Practice note, Review and reform of Consumer Credit Act 1974 (CCA): FCA Final Report on retained CCA provisions).
- The FCA’s report following the Woolard Review, which was published in February 2021 (see Practice note, Review of unsecured credit market (Woolard Review)).
- The introduction of the consumer duty in July 2023 (see Practice note, Hot topics: FCA consumer duty).
Unfortunately, more often than not, progress has slowed if not stalled as a result of, among other things, Brexit, COVID-19, changes of government and different legislative priorities. However, there now appears to be light at the end of the tunnel. On 19 May 2025, HM Treasury launched a consultation paper on the first phase of CCA reform. Responses are due by 21 July 2025.
The intention is the wholesale replacement of the current regime with a “simpler, more agile regime that puts consumers at its heart”. The idea is to replace the 51-year-old CCA, which has been rejigged and patched up more times that I care to count and forced to accommodate developments that could barely be conceived half a century ago, with a new regime designed for and fit for the 21st century.
For information on the reforms, see Practice note, Review and reform of Consumer Credit Act 1974 (CCA): Phase 1 of CCA reform.
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