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Clause 2 - Removal of financial limits etc.

Part of Consumer Credit Bill – in a Public Bill Committee at 8:55 am on 23rd June 2005.

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Photo of Gerry Sutcliffe Gerry Sutcliffe Parliamentary Under-Secretary (Trade and Industry) (Employment Relations and Consumer Affairs) 8:55 am, 23rd June 2005

The clause removes the current financial limit for regulation under the 1974 Act. The financial limit defines those consumer credit and consumer hire agreements that are currently protected under the Act. At present only agreements providing credit or requiring hire payments up to the £25,000 limit are protected. The initial limit of £5,000, which was a considerable sum in 1974, was raised to £15,000 in 1985, and the current £25,000 limit was introduced in 1998. For many consumers £25,000 is no longer a substantial amount of borrowing. The average debt consolidation loan now exceeds that sum. Clauses 1 and 2 remove the financial limit that applies to consumer credit and hire agreements.