S.I. 2012/2798 · Made 7 November 2012 · Extends to England, Wales and Scotland
Up to date with all changes known to legislation.gov.uk, revised to 31 December 2020.
Consumer Credit
Made 7th November 2012
Laid before Parliament 9th November 2012
Coming into force 28th January 2013
The Secretary of State, in exercise of the powers conferred by sections 55(1), 60(1), 77A(2) M1, 95(1) M2, 95B(1)(b) and (3)(c) M3, 97(1) M4, 182(2) M5 and 189(1) of the Consumer Credit Act 1974 M6, makes the following Regulations:
Section 95B was inserted by the Energy Act 2011 (c.16), section 29(2) and extends to England and Wales and Scotland only. Section 95B was commenced on 21st March 2012 for the purposes of enabling the exercise, on or after that day, of any power to make regulations conferred by that section (see S.I. 2012/873, article 3). This section is yet to be commenced for remaining purposes.
“the 1974 Act” means the Consumer Credit Act 1974;
“actual plan interest” means the total amount of interest that falls due for payment under the green deal plan between the settlement date and the full discharge date if early settlement takes place;
“administration amount” means the amount by which the creditor expects its administration costs will be reduced in consequence of early settlement taking place;
“compensatory amount” means the amount that a creditor is entitled to claim under section 95B(2) of the 1974 Act, calculated in accordance with regulation 4;
“early settlement” means, as appropriate, full early settlement or partial early settlement;
“expected plan interest” means the total amount of interest that falls due for payment by the debtor under the green deal plan between the settlement date and the full discharge date if early settlement does not take place;
“full discharge date” means the date fixed by the green deal plan for the discharge in full of the indebtedness of the debtor;
“full early settlement” means the discharge in full, pursuant to section 94(1) M1 of the 1974 Act, of the debtor's indebtedness under a green deal plan;
“green deal plan” has the meaning given in section 1 of the Energy Act 2011 M2;
“notice date” means the date on which the creditor receives notice from the debtor under, as appropriate, section 94(1) or section 94(4)(a) M3 of the 1974 Act, in connection with early settlement;
“partial early settlement” means the discharge in part, pursuant to section 94(3) M4 of the 1974 Act, of the debtor's indebtedness under a green deal plan;
“replacement interest” means F1... the total amount of interest that the creditor could obtain by lending the settlement amount on the market on the notice date;
“settlement amount” means, in respect of—
(a)
full early settlement, the amount payable by the debtor to the creditor under section 94(1) of the 1974 Act, excluding any amount which the creditor claims under section 95A(2) or 95B(2) of the 1974 Act; or
(b)
partial early settlement, the amount paid or to be paid by the debtor to the creditor pursuant to the notice provided by the debtor under section 94(4)(a) of the 1974 Act; and
“settlement date” means—
(a)
the date falling 28 days after the notice date; or
(b)
any later date specified by the debtor in the notice under, as appropriate, section 94(1) or section 94(4)(a) of the 1974 Act as the date of early settlement,
if the debtor pays the amount payable not later than that date.
Subject to paragraph (3), for the purposes of section 95B(3)(c) of the 1974 Act, the compensatory amount is the amount given by the following formula—
(2)
The following apply for the purposes of the formula in paragraph (1)—
“A” means the expected plan interest;
“B” means the replacement interest;
“C” means the administration amount; and
“D” means—
(a)
where full early settlement takes place or is to take place, zero; or
(b)
where partial early settlement takes place or is to take place, the actual plan interest.
(3)
If the amount given by the formula in paragraph (1) is zero or less, for the purposes of section 95B(3)(c) of the 1974 Act, the compensatory amount is zero.
The Consumer Credit (Agreements) Regulations 1983 M1 are amended as follows.
(2)
In paragraph 24A (statement regarding debtor's right of early repayment) M2 of Schedule 1 (information to be contained in documents embodying regulated consumer credit agreements other than modifying agreements), for “section 95A”, substitute “ sections 95A and 95B ”.
(3)
In paragraph 24A (statement regarding debtor's right of early repayment) M3 in Part I (information to be contained in documents embodying regulated modifying agreements varying or supplanting earlier credit agreements) of Schedule 8 (regulated modifying agreements), for “section 95A”, substitute “ sections 95A and 95B ”.
In paragraph 3A (compensatory amount) M1 of the Schedule (information to be contained in settlement statements) to the Consumer Credit (Settlement Information) Regulations 1983 M2, after “95A(2)”, insert “ or 95B(2) ”.
The Consumer Credit (Early Settlement) Regulations 2004 M1 are amended as follows.
(2)
In regulation 1(2) (interpretation) M2, at the appropriate place, insert—
““green deal plan” has the meaning given in section 1 of the Energy Act 2011;”.
(3)
In regulation 4A(2) (calculation of the amount of rebate where indebtedness is discharged in part) M3, after “95A(2)”, insert “ or 95B(2) ”.
(4)
In regulation 6 (deferment of settlement date)—
(a)
regulation 6 is renumbered as paragraph (1) of that regulation;
(b)
after paragraph (1) as so renumbered, insert—
“(2)
Paragraph (1) does not apply where the agreement is a green deal plan and the creditor under that plan is claiming a payment under section 95B(2) of the Act.”.
In paragraph 4 (other important legal aspects) of Schedule 1 (pre-contract credit information) to the Consumer Credit (Disclosure of Information) Regulations 2010 M1, in column 2 of the second row of the table, after “section 95A” insert “ (and, where applicable, section 95B) ”.
In paragraph 28 (early repayment) of Schedule 1 (information to be included in regulated consumer credit agreements) to the Consumer Credit (Agreements) Regulations 2010 M1, in column 3 of the table, for “section 95A”, substitute “ sections 95A and 95B ”.
These Regulations relate to the green deal energy efficiency scheme (“the Green Deal Scheme”) established by Chapter 1 of Part 1 of the Energy Act 2011 (“the 2011 Act”).
These Regulations, which apply to Great Britain, make provision under section 95B of the Consumer Credit Act 1974 (“1974 Act”). Section 95B, which was inserted by section 29 of the 2011 Act, enables a creditor to claim compensation from a debtor where all or part of the credit outstanding under a green deal plan is repaid early. Section 95B only applies to green deal plans that are regulated consumer credit agreements under the 1974 Act.
These Regulations also make amendments to consumer credit secondary legislation in consequence of section 95B of the 1974 Act and the creation of the green deal energy efficiency scheme.
Regulation 1 provides for the commencement and extent of these Regulations.
Regulation 2 defines terms used in these Regulations.
Regulation 3 specifies the length of green deal plan for which creditors are able to claim compensation under section 95B of the 1974 Act.
Regulation 4 specifies the method for calculating the compensatory amount allowed under section 95B of the 1974 Act.
Regulation 5 and the Schedule to these Regulations make amendments to consumer credit secondary legislation.
A full regulatory impact assessment has not been produced for this instrument as no impact on the private or voluntary sectors is foreseen. However, a full regulatory impact assessment of the effect that the Green Deal Scheme will have on the costs of business and the voluntary sector is available from the Green Deal Legislation Team, Department of Energy and Climate Change at 3 Whitehall Place, London SW1A 2AW and is published alongside the Green Deal Framework (Disclosure, Acknowledgment, Redress etc.) Regulations 2012 (S.I. 2012/2079) on www.legislation.gov.uk.
