UK credit card laws likely to change
Change could come as a result of new U.S. card laws
By UK CreditCards.com
Legislation on credit cards in the UK could soon be changed, reflecting the new US Credit Card Accountability Responsibility and Disclosure Act (CARD Act).
This is the view of Auriemma Consulting Group, which pointed out that reforms to consumer lending regulations in America are commonly reflected across the Atlantic within three years.
The CARD Act, signed by president Barack Obama this summer, imposes new controls on credit card lenders in order to promote responsible borrowing.
Auremmia Consulting said that, due in part to the severity of the present financial downturn, similar laws could be adopted in the UK as soon as the end of 2010.
The report also predicted the widespread changes that could come to the market as a consequence of the legislation, including the dying-out of bonus offers for new card customers. By contrast, card products offering fixed annual rates are expected to become more numerous.
Matt Simester, director of Auremmia Consulting, also expressed concern that higher-risk credit card applicants could be rejected in greater numbers in future, leading them to turn to unregulated lenders such as loan sharks.
"For many consumers, a credit card -- even one with a higher rate -- is the only legitimate borrowing channel accessible to them," he added.
Published: 8 September 2009
- Industry responds to FCA's proposal on persistent credit card debt – Here's what industry experts have to say about the FCA's proposal to help credit card consumers in "consistent debt" ...
- Open banking FAQs answered – What is the new "open banking" initiative, how will it work and how will it benefit you? ...
- FAQs on FCA proposal for helping consumers with persistent credit card debt – The FCA is suggesting new rules for credit card companies to help those with "persistent debt". Here's what you need to know ...