Most notably, the eagerly awaited phase two consultation has been consigned to history, along with the Sinclair C5. The government had intended to consult on reforms to the scope of regulation and rights and protections under the CCA. It now says it has enough evidence to proceed without doing so.

But that is not the whole story. One view is that the focus has been on the low-hanging fruit. It is hardly surprising that the knottier issues - antecedent negotiations, unfair relationships and connected lender liability - have been kicked down the road yet again, with no clear timetable for when they will be addressed. The government says it “may bring forward proposals in relation to these in future”, so read into that what you will.

So where does that leave us? As with all things consumer credit, there is good news and some not-so-good news for lenders.

Unenforceability and other sanctions

It has long been an oddity that failing to comply with prescriptive requirements on the form, content and execution of credit agreements can render a consumer credit agreement unenforceable, while equivalent rules do not apply to the largest debt most of us ever take on: a mortgage. Unenforceability has always been a sledgehammer to crack a nut: relatively minor infractions can trigger it and, in many cases, it bears no link to borrower detriment. The Government has now announced plans to remove the automatic sanctions of unenforceability and disentitlement to interest and fees - the most significant step yet towards levelling the playing field between regulated credit agreements and mortgages.

Information requirements

As anticipated, most of the prescriptive rules on the form and content of pre-contractual, contractual and post-contractual documents will be repealed, as we continue our journey into the brave not-so-new world of the consumer duty. That may prove a mixed blessing. Although form and content requirements have loosened over time, the current requirements still provide something of a safety blanket.

A recurring theme is the shift from prescriptive statutory requirements to FCA rules, although the government is clear this will not be a “cut and paste” exercise. In its view, the changes will allow greater flexibility and innovation, and make future regulatory change “simpler and quicker to bring in”. But flexibility also brings the prospect of shifting rules, guidance and regulatory expectations - and the challenges that come with them.

Criminal offences

Again, as expected, these will be retained for their deterrent value. 

Consumer rights

For consumer rights, the current jigsaw of FCA rules and legislation looks set to remain. Several important rights will move from statute to FCA rules, including certain rights in relation to:

• withdrawal and cancellation;
• early settlement and rebates;
• voluntary termination (in relation to hire-purchase and conditional sale agreements); and
• termination of open-end consumer credit agreements.

That will not be true across the board. Provisions that cannot be delivered through FCA rules - such as those on linked transactions, ancillary services and the passing of title to goods - will remain in legislation (but may be amended).

Innovation, Islamic finance and green finance

Under the proposals, innovation, Islamic finance and green finance all potentially stand to benefit. The CCA’s prescriptive requirements have long created barriers for all three. The policy statement noted the feedback received that existing terminology is incompatible with Sharia-compliant products, so new flexibility should help lenders tailor products and services to specific religious and cultural needs. On green finance, the policy statement was more neutral, acknowledging the different views and saying that it is important to strike a balance between consumer protection on the one hand, and competition and innovation on the other.

Credit broking

Alongside the CCA reforms, the government has signalled its intention to review the regulatory regime for credit broking. That is somewhat surprising, given the regime was recently reviewed in the context of the Buy Now, Pay Later (BNPL) changes, which created an unlevel playing field in the name of market preservation, by making exemptions available to BNPL product merchants but not to those offering other regulated credit products. The review is intended to ensure the regime remains proportionate, supports financial inclusion and provides robust consumer protection. It may be an idle hope to think it will also address the position of exempt agreements. It is hardly proportionate that a credit broker should need to be regulated when the same does not apply to where a lender offering only exempt agreements does not, but we shall see.

Next steps

The government has confirmed that the transition from the old regime to the new must be smooth and gap-free, at least for those parts that are moving. For that reason, the relevant legislative provisions will be repealed only once the FCA rules replacing and recasting them are in place. The plan also includes an enabling power allowing the government to make secondary legislation on the transitional provisions.

The FCA has published its own short statement confirming its intention to consult on the key elements of the consumer credit framework currently set out in legislation, where it has the power to do so, taking in the whole consumer credit process and, of course, underpinning it with the consumer duty - which sets out its expectations for firms to deliver good outcomes for consumers.

The required legislation will be brought forward as part of the Financial Services and Markets Bill announced on 13 May 2026. So what does this mean for the CCA itself? For now at least, to misquote Mark Twain, reports of its death are exaggerated.

For further background on the UK consumer credit developments, you may also like to read our earlier article on CCA reform: Goodbye old friend? HM Treasury consultation on Consumer Credit Act 1974 reform.