Timescale
The latest information from BIS is that revised draft Regulations will be passed to Parliamentary Counsel by mid-October. BIS has said that it will also circulate this version of the draft Regulations to consultees.
BIS is currently holding firm on the June 2010 implementation date, with any transitional period occurring before the 11 June 2010 deadline.
There will be an ongoing need to monitor any changes to the timetable and the draft Regulations.
Project Process
Need to establish the project process in order to:
- Scope changes by reference to latest available draft Regulations;
- Develop preliminary business requirements based on draft Regulations;
- Develop implementation plan based on preliminary business requirements;
- Develop definitive business requirements when final Regulations are published;
- Roll-out during (anticipated) transitional period.
Matters to be reviewed and considered
Scope
- Identify which products are within the scope of the draft Regulations and the applicable financial limits;
- Opportunity to make other changes to agreements or products?
- Affect of CCD on voluntary Termination (CCA Sections 99/100) – hire-purchase and conditional sale;
- Impact on products, policies, processes and systems generally;
- Budgeting – cost of implementation; cost of business as usual.
Advertising
- Assess impact on current advertisements; consider how new advertisements might be different (opportunities/constraints);
- Training and guidance for marketing departments and agencies. Consider advertising lead times;
- Prepare and launch new advertisements.
Pre-Contractual Information
- SECCI will require systems and procedures amendment;
- Options for non-exempt business lending, credit exceeding £100K and secured loans.
Adequate Explanations
- Requirements for oral and written explanations of credit facilities;
- Credit policy considerations.
Credit Worthiness/Irresponsible Lending
- Review credit proposal and acceptance procedures;
- Credit policy considerations;
- Compliance with OFT guidance on irresponsible lending.
Credit Agreements
- Revise form and content of regulated agreements;
- Consider options for providing copy agreements;
- Production of amortisation tables on request;
- Options for non-exempt business lending, credit exceeding £100K and secured loans.
Right of Withdrawal
- Consider likelihood/impact of customers refinancing after signing agreement;
- Consider legal aspects as withdrawal does not cancel any associated sale of goods;
- Consider impact of withdrawal on dealer commission.
Early Repayment
- Impact of oral notice on full early settlement processes;
- Capturing requests for part only repayment (consider waiver of requirement for notice);
- Process for calculating future payments, loading to system and communicating to borrower;
- Training customer services functions.
APR Calculation
- Consider impact of changes to assumptions;
- Check against existing model.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.