On 28 September 2018, the government laid down an updated version of The Consumer Credit (Amendment) (EU Exit) Regulations 2018 before Parliament, together with an explanatory memorandum. These set out the changes which are being proposed to existing consumer credit legislation when the UK leaves the EU next year.
What changes do the Brexit Regulations propose?
The regulations make minor and technical amendments to existing consumer credit legislation to ensure that it continues to operate effectively when the UK leaves the EU. They do not have a material impact on how the consumer credit regime currently operates.
The main changes that creditors need to be aware of relate to the pre-contract information that is provided to customers before they enter into a credit agreement.
Lenders will need to ensure that:
- the words "(Standard European Consumer Credit Information)" are deleted from the front page of the SECCI;
- for overdrafts, the words "European Consumer Credit Information" are deleted and replaced with "Pre-contract Consumer Credit Information (Overdrafts)"; and
- if applicable, updates are made to the first column in section (a) of table 5 of the SECCI to remove the reference to "your Member State of residence" and to substitute this with "the United Kingdom". Similar changes will be required to the ECCI.
When do the changes take effect?
These changes will come into effect on 29 March 2019 in the event of a no-deal Brexit, otherwise, they will take effect from 1 January 2021, after the end of a transitional period, subject to any extensions of that transitional period.
The regulations do not provide for a transitional period, which means that if the UK does leave the EU on 29 March 2019 without a deal being reached, lenders would need to be ready to use the updated form of SECCI and ECCI from 29 March 2019 to ensure they continue to meet the strict form and content requirements of the Consumer Credit Act 1974.