[HOC News] High Cost Credit Bill: Second Reading, 12 July, 9.30am

UKParliament

Please note - This is an alert for upcoming business inside the Chamber of the House of Commons. It is posted here as it is hoped to be of interest to MSE forum members.

Our goal is to post up information on work undertaken in the House of Commons that has a consumer focus but which may not be highlighted elsewhere. We encourage discussion and comments concerning the topic or content of the debate.

Private Members Bill: High Cost Credit Bill: Second Reading
Friday 12 July, scheduled to start at 9.30am

The Bill was presented to Parliament through the ballot procedure as a Private Members Bill on 19 June 2013.

Summary: A Bill to make provision for regulating high-cost credit arrangements and providers of such arrangements; to provide for controls on advertising, information and communications associated with such arrangements; to make measures to address the cost and affordability of such credit arrangements and their associated charges; to regulate matters concerning repayments under such arrangements; to make provision on advice and advice services in relation to debt arising from such arrangements; and for connected purposes.

Bill documents will be available soon and will be posted up on this thread for MSE’ers with an interest in the progress of the High Cost Credit Bill through Parliament.

The debate will be streamed live on Parliament.tv Player
(Please note that Silverlight or Windows Media Player are required to stream Parliament TV)

Transcripts of proceedings in the House of Commons Chamber are available three hours after they happen in Today's Commons Debates

We will post up a summary of the Second Reading debate following its conclusion; we hope this will be of use to interested members of MSE – maybe those with experience of High Cost Credit or those with an interest in High Cost Credit regulation.

About Private Members Bills:
Private Members' Bills are Public Bills introduced by MPs and Lords who are not government ministers. As with other Public Bills their purpose is to change the law as it applies to the general population. A minority of Private Members' Bills become law but, by creating publicity around an issue, they may affect legislation indirectly.

About Second Reading:
The Government minister, spokesperson or MP responsible for the Bill opens the second reading debate. The official Opposition spokesperson responds with their views on the Bill. The debate continues with other Opposition parties and backbench MPs giving their opinions.

At the end of the debate, the Commons decides whether the Bill should be given its second reading by voting, meaning it can proceed to the next stage.

It is possible for a Bill to have a second reading with no debate - as long as MPs agree to its progress.

What happens after second reading?
Once second reading is complete the Bill proceeds to committee stage - where each clause (part) and any amendments (proposals for change) to the Bill may be debated.

To find out more about the passage of a Bill through Parliament please visit Guide to the Passage of a Bill

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We would like to inform MSE’ers that we are politically impartial and cannot comment on government policies.

UKParliament

The debate on the Private Members Bill on Regulation of High Cost Credit continued for almost 5 hours on Friday 12 July (with an interruption for an urgent question on tobacco packaging) with the debate being adjourned at 2.30pm to be resumed on Friday 6th September 2013.

Topics raised during the course of the debate by the proposing MP Paul Blomfield included the issues of:

• Affordability – “Citizens Advice found that only 36% of [people surveyed about payday loans] were asked questions to check whether they could afford to pay back the loan”.
• Rollover charges – “The OFT found that 28% of loans were rolled over at least once and they accounted for 50% of lenders’ revenues”
• Debt collection – “the Bill requires lenders to give customer three days’ notice of every CPA [continuous payment authority] withdrawal and to ensure that customers are clear on their right to cancel CPAs”
• Debt management – “the Bill does not seek to close down the sector, but I hope it would reduce the number of payday loans by signposting people towards debt advice, thereby opening them up to the kind of support that might lead them in other directions and prevent them from being caught in the spiral of debt”

Responses already in place to regulate high cost credit:

• Damian Hinds MP raised the point that “the new FCA regime could produce quite a dramatic change over time, with credit unions becoming bigger, offering an improved product range and so on.”
• The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Jo Swinson) commented on steps the government has already taken including the creation of the FCA - “The FCA has made it clear that it is committed to plugging gaps in payday regulation and has outlined four specific areas that it wants to target: first, affordability checks; secondly, continuous payment authority; thirdly, advertising; and fourthly, roll-over loans”.
• Regarding regulation “Existing guidance from the Office of Fair Trading includes provisions on roll-overs. It is cracking down on non-compliant lenders”.

What happens now?
There has not yet been a vote on whether or not the Bill should continue on its journey through Parliament. It is now on the list of Bills to be considered on 6th September.

For those wishing to watch back the debate we can now link to it on Parliament TV http://www.parliamentlive.tv/Main/Player.aspx?meetingId=13473

We can also link to the full transcript should anyone wish to read some of the discussions that took place - http://www.publications.parliament.uk/pa/cm201314/cmhansrd/cm130712/debtext/130712-0001.htm#13071272000002

The Bill’s purpose is to enable further controls to be introduced on ‘high cost credit’ companies – particularly payday loans companies. It would, amongst other things,

• restrict the amount of high-cost credit that can be advanced;
• limit the level of default charges;
• end charges connected with the use of ‘continuous payment authority’;
• and restrict ‘rollover’ and repeat lending.

For a summary explanation of this Private Members Bill feel free to read the High Cost Credit Bill Research Paper http://www.parliament.uk/briefing-papers/RP13-44 (please note - the research paper itself opens as a PDF).

Former_MSE_Wendy

Thanks DOT!

This is one we're following closely here at MSE Towers.

It was great to see Martin's idea to get an emergency credit card and put it in the freezer (Column 698 of the full transcrip for anyone wanting to have a gander) mentioned by Jo Swinson. He met with the Minister on Wednesday last week to talk about the issues she is responsible for including pay day loans.

There are more ideas on how to avoid getting high cost loans in our guide http://www.moneysavingexpert.com/loans/payday-loans

Wendy