HM Treasury has published a policy statement and its response to the first phase consultation on reforming the Consumer Credit Act, marking the first broad modernisation of the regime in more than 50 years. The core change is to move many of the Act’s detailed and prescriptive requirements out of legislation and into the Financial Conduct Authority rulebook, so disclosure and conduct requirements for credit cards, loans, overdrafts and other borrowing products can be updated more easily as products and technology change. The stated aim is to give consumers clearer and better timed information on costs and key terms while giving firms more flexibility to develop new products. The government says the current framework has not kept pace with digital financial products and services. Under the new approach, regulations will be informed by consumer testing and kept under review, with a particular focus on making information genuinely useful for decision-making and more accessible for vulnerable consumers. HM Treasury also says the Consumer Credit Act’s protections will be maintained, with the Financial Conduct Authority continuing to use its enforcement powers, including fines, against firms that breach the rules.
HM Treasury2026-05-18
HM Treasury sets final approach to Consumer Credit Act reform by shifting detailed requirements into Financial Conduct Authority rules
HM Treasury has issued a policy statement and response to its first phase consultation on reforming the Consumer Credit Act, initiating the first broad modernisation of the regime in over 50 years. The government plans to move many detailed requirements into the Financial Conduct Authority rulebook to allow more flexible updating of rules for credit products, while maintaining existing protections and enforcement. Regulations will be informed by consumer testing and aim to improve the clarity and accessibility of information, including for vulnerable consumers.