"Protection in creation of the consumer credit relationship" [2019] ELECD 2504; in Brown, Sarah (ed), "The Regulation of Consumer Credit" (Edward Elgar Publishing, 2019) 155

Book Title: The Regulation of Consumer Credit

Editor(s): Brown, Sarah

Publisher: Edward Elgar Publishing

Section: Chapter 6

Section Title: Protection in creation of the consumer credit relationship

Number of pages: 34

Abstract/Description:

There are a number of ways in which borrowers can be protected from exploitation, before and at the point of entering a consumer credit transaction, both prescriptive and proscriptive. Prescriptive measures are found in requirements of transparency and responsible lending. Proscriptive controls are based in product intervention such as the control of cost. Other direct control in relation to the creditor is provided through gatekeeping devices of licensing and authorisation. The chapter considers the regulatory devices employed in relation to the creditor’s ability, and the borrower’s decision, to enter into a consumer credit relationship. It examines US and UK regulation of measures in product intervention through interest rate caps and the arguments for and against such a measure. It looks at creditor responsibilities in information requirements, and responsible lending, before drawing some conclusions from the comparisons that are made.