What’s this about?
On 18 May 2026, the Treasury (HMT) published its policy statement on reform of the Consumer Credit Act 1974 (CCA). We previously set out the changes being taken forward in Phase 1 of CCA reform and those being paused from Phase Two. Since May the Financial Services and Markets Bill (FS Bill) has been making its way through the House of Lords (HoL). This is a recap of how the FS Bill is progressing and the next steps to look out for.
Our Head of Financial Regulation, Amanda Hulme, says...
“With the Government consultation coming to an earlier than expected end, the implementation stage is starting early. Focus will now move onto the FCA consultation on its rules, but firms can start doing some work to prepare for a modernised consumer credit regime. Firms should also engage fully with the FCA consultation to influence the rules the FCA introduces. Whilst some firms may be disappointed by certain changes being put on the back burner, we expect firms will want to take some of the work already done into future targeted lobbying efforts."
The points not to miss...
FS Bill progress
The FS Bill had its first reading in the HoL on 19 May 2026 and its second reading on 8 June 2026. It is currently at committee stage in the HoL and is yet to go through the House of Commons (HoC). The provisional start date for the report stage in the HoL is 7 September 2026.
HoC Library Research Briefing
The HoC Library published a research briefing on consumer credit on 29 July 2026, including details on the current reform and proposed partial repeal, with a view to how these changes affect borrowers, buy-now-pay-later regulation and car finance mis-selling. Overall, the briefing emphasises the shift from information requirements and consumer rights sitting in primary legislation and being moved into FCA Rules, while removing the CCA's automatic sanctions for non-compliance. Firms are also left with considerable uncertainty around complex consumer rights and protections, with further policy work on the way.
FCA response
In light of HMT's policy statement, the FCA has established that it intends to incorporate existing consumer credit rules into its Handbook having particular regard to the Consumer Duty. It believes that this approach will enable it to bear in mind the entirety of the consumer credit life cycle.
What next
Firms are waiting for the transitional rules and the new FCA rules. We don't expect them for some time. In the interim we have been working through the FS Bill to figure out what is left in the CCA and how the FCA's rule making powers could impact the way that new FCA rules are implemented. Over the next few weeks, we will be publishing articles highlighting areas that firms may want look at.
At a glance...
| Publication link | Financial Services and Markets Bill [HL] publications - Parliamentary Bills - UK Parliament Consumer credit - House of Commons Library |
| Publication date | 29 July 2026 |
| Who has published it? | UK Parliament |
| Publication type | Draft legislation |
| Any key dates? | 7 September 2026 |
| What's it relevant to? | Consumer Credit Act 1974; Consumer credit reform; Financial Services and Markets Bill |
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.
[View Source]
