Consumer Loan

2 Key excerpts on "Consumer Loan"

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  eBook - ePub

  Consumer Protection Law

  • Geraint Howells, Stephen Weatherill(Authors)
  • 2017(Publication Date)
  • Routledge

    (Publisher)

  Chapter6 Consumer Credit: Private Law 6.1 INTRODUCTION The consumer credit industry is an important sector of the economy and one which has a strong impact on the economic health of the nation. 1 Until the early 1970’s consumer credit regulation had two explicit aims – to protect consumers and ensure the amount of consumer credit did not have deleterious effects on the general economic health of the nation. 2 Strands of this latter policy remained until 1982, when the practices of requiring minimum down-payments and maximum repayment periods were discontinued. 3 Whilst no longer an explicit policy of the law, the link between consumer credit regulation and the wider economy remains. Lenders can either be too cautious and dampen down economic activity or too willing to lend stoking up the economy, especially the housing market. The current discussion about introducing a responsible lending principle suggests that most concern is nowadays with lenders’ eagerness to lend. The White Paper, Fair, Clear and Competitive, 4 reported that seven per cent of households were over-indebted judged by the criteria used for the Household Survey, whereas 20 per cent of those approached admitted to having financial difficulties. 5 Unsurprisingly this was linked to low income and financial and social exclusion. For instance, the percentage of over-indebted households rose to 14 per cent where weekly income was between £150–200. Common causes of falling into debt are major life events such as separation from a partner, having a child, falling ill or becoming disabled, or changes in circumstances such as loss of employment. However, one in seven people cited long-term low income as a cause. The White Paper dwelt on the costs of over-indebtedness and in particular the impact on the heath and prospects for debtors and on the costs to the state of picking up the pieces of debtors who are stressed, ill and potentially vulnerable to lose their home, jobs and future access to credit

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  eBook - ePub

  Law Between Buildings

  Emergent Global Perspectives in Urban Law

  • Nestor Davidson, Nisha Mistry(Authors)
  • 2016(Publication Date)
  • Routledge

    (Publisher)

  3

  Consumer credit has grown exponentially over the past fifty years in the United States,4 as has residential mortgage debt.5 Similarly, access to financial services related not just to borrowing, but also to payment and savings, also has grown over time.6 This growth has led to demand for regulation of a wide range of consumer finance transactions and financial services industries.

  Although growth in household credit, and especially in markets for sub-prime loans and fringe financial products, such as pay-day lending, rent to own, tax refund loans, car title pawn and check cashing services, has created regulatory needs, consumer finance regulation often faces concentrated opposition from the financial service industries.7 Consumers are unlikely to possess the political influence or power of concentrated financial industries, since consumers’ interests generally are diffuse and underfunded.8 Moreover, collective action problems can thwart consumers’ efforts to join together to form organizations focused on consumer advocacy; where these organizations exist, they are often underfunded.9 International regulation of consumer finance may raise difficulties that exceed these existing in a national context because consumer-focused regulations may be viewed as presenting issues of social and cultural concern, which international organizations often assiduously look to avoid.10

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