Explanatory note
(This note is not part of the Order)
This Order consolidates the Consumer Credit (Exempt Agreements) (No. 2) Order 1985 as amended, which provides that certain consumer credit and consumer hire agreements shall be exempt agreements for the purposes of the Consumer Credit Act 1974.
The Order provides that the following consumer credit agreements are exempt agreements:—
certain agreements secured on land where the creditor is a building society, bank or body specified in Schedule 1 to the Order (Article 2);
certain agreements where the number of payments to be made by the debtor does not exceed the number specified (Article 3);
certain agreements where the rate of the total charge for credit is a rate which does not exceed the highest of the specified banks' base rate plus one per cent, or 13 per cent, whichever is the higher (Article 4);
certain agreements having a connection with a country outside the United Kingdom or made between a U.S. Federal Credit Union and defined persons having a connection with the U.S. armed forces (Article 5).
The Order also provides that consumer hire agreements are exempt agreements where the owner is a body corporate authorised by statute to supply electricity or water and the subject of the agreement is a meter or metering equipment used in connection with that supply (Article 6).
Article 3(1)(a)(i) amends the previous Order to exempt agreements which are repaid by a maximum of 4 payments in a period not exceeding 12 months from the date of the agreement, and brings the provision into line with Council Directive 87/102/EEC (O.J. L42, 12.2.1987, p. 42).
Eleven further bodies are included in Schedule 1; one is deleted, and the names of two are amended.
Schedule 2 lists the Orders revoked by this Order.
The text of the Federal Credit Union Act referred to in Part IV of Schedule 1 is available for inspection by prior arrangement at the Department of Trade and Industry (Overseas Trade Division 2), 1 Victoria Street, London SW1H 0ET.