CCA SECCI EU exit changes

Morton Fraser Partner John Lunn
John Lunn
01 December 2020

The short answer to the exam question is that we now know for sure that we will have five months from "IP completion day" (previously known as "exit day") to change our SECCIs following the UK's exit from the EU on 31 December 2020.

These are the long-awaited changes to Schedule 1 of the Consumer Credit (Disclosure of Information) Regulations 2010 (the "DOI Regs") in relation to the form of Pre-contract Credit Information for regulated credit agreements (known to all as a "SECCI", and by some as a "PCCI").  

As a reminder, we are to:

(a)              omit “(Standard European Consumer Credit Information)” after the heading; and

(b)              in table 5, in section (a) of the table, in the first column, in the entry commencing “The creditor's representative”, for “your Member State of residence” substitute “the United Kingdom”.

Equivalent changes are made to shortened form (the "ECCI") that can be used for overdrafts as set out in Schedule 3 of the DOI Regs, though the form will now be known as the "Pre-contract Consumer Credit Information (Overdrafts)".  Most lenders don't bother with the form, and so overdrafts should be less of an issue.

The transitional arrangements provide for "a period of five months beginning on IP completion day" [our emphasis], presumably because the UK exits the EU at 23:00 on 31 December 2020, rather than at midnight.  On that basis, the transitional period will end on 30 May 2021 - and not on 1 June as had been previously trailed.  The arrangements allow us to continue with our forms as currently worded, provided that we change them on or before 30 May 2021.

For fellow CCA nerds, the long answer to the exam question is:

Regulation 3 and paragraph 49(b) of the Financial Services and Economic and Monetary Policy (Consequential Amendments) (EU Exit) Regulations 2020 (SI 2020/1301) come into effect on 31 December 2020, amending Regulation 14 of the Financial Services (Miscellaneous) (Amendment) (EU Exit) (No. 3) Regulations 2019 (SI 2019/1390) to substitute "IP completion day" for the words "exit day" in Regulation 14.

Regulation 14 had in turn previously amended Regulation 40 of the Financial Services (Miscellaneous) (Amendment) (EU Exit) Regulations 2019 (SI 2019/710) so as to substitute "for a period of five months beginning on exit day" for the original transition period of "until 1st September 2019".  If memory serves, that date was five months, give or take, from a previous iteration of exit day before it moved to the end of December 2020.

And finally, Regulation 40 had given effect to transitional provisions (until 1st September 2020) by inserting a new Regulation 6 into the Consumer Credit (Amendment) (EU Exit) Regulations 2018 (SI 2018/1038).  These transitional provisions were required as Regulation 3 of those original 2018 EU Exit Regs required the SECCI and ECCI changes to be made on exit day (now IP completion day), with no transitional provisions.  Without change to allow for a transitional period, this would have almost certainly led to lenders being unable to enforce regulated credit agreements with a defective SECCI or ECCI without first having to obtain a court order.  Fortunately some effective lobbying by the likes of UK Finance and the FLA won the day, and we now have our five month period of grace.  That should be one New Year's resolution that we should be making, and not breaking!

John Lunn is our Head of Retail Banking and Consumer Finance, and is a recognised expert in Consumer Credit law and practice.  Please contact John if you have any questions on these changes.



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