Consumer Credit Bill

I would certainly like to put on the record my appreciation of the work of credit unions. However, they are not accessible to everyone in those circumstances. We need to promote a diverse and varied credit industry. I hope that the Minister and the Department will continue to work with the industry to do so once the Bill is enacted. However, I fear that the industry may withdraw its services from certain parts of society if the law is not certain or if it is over-prescriptive. A balance needs to be struck. My hon. Friend the Member for Hertford and Stortford referred to the briefing note circulated by APACS, which highlighted concerns about withdrawal from the market:"““In practice we are concerned that the OFT will set an unnecessarily wide definition and that this will in turn have an impact on whom lenders choose to lend to.””" Lenders should be more cognisant of the people to whom they are lending. That is the concept of responsible lending that Members on both sides of the House have sought to promote throughout the progress of the Bill. There should be greater responsibility, but not if that means that services are withdrawn wholesale from certain parts of the market. It is self-evident that the socially disadvantaged are in a difficult situation, so an extortionate credit bargain under the existing legislation could put them in a much worse position. People would not have access to direct or regulated credit, so they would fall prey to the unregulated sector. There has been reference to the involvement of the courts. In exercising its powers, the OFT must be certain about its remit and the provisions that it seeks to interpret. We have missed an opportunity by failing to spell out the concept of irresponsible lending in the Bill. In Committee, the Minister said:"““If we are very specific about an issue we could undo what we are trying to achieve.””" I agree. He continued:"““For many, responsible lending imposes a requirement that lenders do certain things before extending credit. However, the things that a lender may take into account in the case of one debtor may be very different to those of another. It will depend on a debtor’s circumstances.""Any duty to lend responsibly would mean defining what is, and what is not, responsible lending.””—[Official Report, Standing Committee D, 28 June 2005; c. 93.]" Several months down the line, we have included the concept of responsible lending in the Bill, but we have not included a definition. I therefore hope that the Minister can explain where we can find such a definition, given his comments on the issue in Committee. In summary, there is not certainty in the Bill about the meaning of responsible lending. I accept that a balance needs to be struck, but clause 29 deals explicitly with fraudulent, deceitful or oppressive practices. As a lawyer, I interpret things according to their context, and such practices suggest that a high standard would have to be breached before the responsible lending test were applied. Someone would therefore have to be guilty of an outrageous practice to breach that standard.