Citation

1. This Order may be cited as the Consumer Credit Act 2006 (Commencement No.4 and Transitional Provisions) Order 2008.

Interpretation

2.–(1) In this Order–

"existing agreement" means an agreement made before 6th April 2008 by which the creditor provided the debtor with credit exceeding £25,000;

"relevant agreement" means a consumer credit agreement of a description set out in Schedule 1;

"the 1974 Act" means the Consumer Credit Act 1974(2); and

"the 2006 Act" means the Consumer Credit Act 2006.

(2) Expressions used in articles 2 to 4 and Schedule 1 have the same meaning as they have in the 1974 Act.

Commencement

3.–(1) The provisions of the 2006 Act specified in Schedule 2 shall come into force on 6th April 2008.

(2) The provisions of the 2006 Act specified in Schedule 3 shall come into force on 1st October 2008.

Transitional Provisions

4.–(1) Section 2(1) of the 2006 Act (removal of financial limits etc.) has no effect for the purposes of the application of section 82(2) of the 1974 Act (variation of agreements) where an agreement–

(a) varies or supplements an existing agreement; and

(b) would not, apart from section 82(2) of the 1974 Act, be treated as an agreement under which credit in the form of a cash loan is provided.

(2) Section 2(1) of the 2006 Act has no effect for the purposes of the application of section 82(2) of the 1974 Act where an exempt agreement varies or supplements an existing agreement.

Article 2(1)

SCHEDULE 1 MEANING OF "RELEVANT AGREEMENT"

1. A consumer credit agreement is a relevant agreement if any sums due under it are secured by a land mortgage on land outside the United Kingdom.

2. A consumer credit agreement is a relevant agreement if any sums due under it are secured by a land mortgage on land in the United Kingdom where the condition in paragraph 3 is satisfied.

3. The condition is that at the time the agreement is entered into less than 40% of the land is used, or is intended to be used, as or in connection with a dwelling–

(a) by the debtor or a person connected with the debtor, or

(b) in the case of credit provided to trustees, by an individual who is the beneficiary of the trust or a person connected with such an individual.

4. For the purposes of paragraph 3 the area of any land which comprises a building or other structure containing two or more storeys is to be taken to be the aggregate of the floor areas of each of those storeys.

5. For the purpose of paragraph 3 a person is "connected with" the debtor or an individual who is the beneficiary of a trust if he is–

(a) that person´s spouse or civil partner;

(b) a person (whether or not of the opposite sex) whose relationship with that person has the characteristics of the relationship between husband and wife; or

(c) that person´s parent, brother, sister, child, grandparent or grandchild.

Article 3(1)

SCHEDULE 2 PROVISIONS COMING INTO FORCE ON 6TH APRIL 2008

Article 3(2)

SCHEDULE 3 PROVISIONS COMING INTO FORCE ON 1ST OCTOBER 2008

EXPLANATORY NOTE

(This note is not part of the Order)

This Order brings into force further provisions of the Consumer Credit Act 2006, which amend the Consumer Credit Act 1974. It is the final Order that will be made.

The provisions in Schedule 2 come into force on 6th April 2008 and the provisions in Schedule 3 come into force on 1st October 2008.

Article 3(1) and Schedule 2 commence section 2(1) of the Consumer Credit Act 2006 insofar as it applies to agreements other than relevant agreements of a description set out in Schedule 1.

Section 2(1) of the Consumer Credit Act 2006 amends section 8 of the Consumer Credit Act 1974 and removes the £25,000 limit for consumer credit agreements. Article 4 of the Order provides that section 2(1) has no effect where an agreement varies or supplements an agreement made before 6th April 2008 for the provision of credit exceeding £25,000 and either does not itself provide for further credit to be advanced or is itself an exempt agreement under the Consumer Credit Act 1974.

NOTE AS TO EARLIER COMMENCEMENT ORDERS

(This note is not part of the Order)

The following provisions of the Consumer Credit Act 2006 have been or are being brought into force by commencement orders made before the date of this Order.