PERG 4.17 Interaction with the Consumer Credit Act

The cumulative effect of article 20(3) of the Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) (No.2) Order 2013 (the 2013 Order) and Chapter 14A of Part 2 of the Regulated Activities Order is to essentially carve out regulated mortgage contracts from regulation under the CCA and from regulation as a credit-related regulated activity.1

Section 126(2) of the CCA (as inserted by the Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2014) provides, however, that for the purposes of section 126(1) of the CCA (a land mortgage securing a regulated credit agreement is enforceable (so far as provided in relation to the agreement) on an order of the court only) and Part 9 of the CCA (judicial control) a regulated mortgage contract which would, but for the exemption in PERG 2.7.19CG(1), be a regulated credit agreement is to be treated as if it were a regulated credit agreement. This is subject to section 140A(5) of the CCA (unfair relationships between creditors and debtors), which provides that an order under section 140B of the CCA (powers of court in relation to unfair relationships) shall not be made in connection with a credit agreement which is an exempt agreement under PERG 2.7.19C G.1

Regulated mortgage contracts that were in place at 31 October 2004 and which are subject to the CCA1 will remain subject to the1 regime in the CCA and may be regulated credit agreements for the purposes of the credit-related regulated activities in Chapter 14A of Part 2 of the Regulated Activities Order1. But there may be instances where a variation of an existing contract amounts to entering into a new regulated mortgage contract (see PERG 4.4.4 G and PERG 4.4.13 G).

Unsecured loans, as well as loans secured on second and subsequent1 charges on property, are not subject to carve-out described above and may be regulated credit agreements for the purposes of the CCA and the credit-related regulated activities for which a person may need permission.1

Article 17 of the 2013 Order has the effect that the controlled activity of providing relevant consumer credit for the purposes of the financial promotion regime does not include regulated mortgage contracts. 1

For more detailed guidance concerning the application of1 the financial promotion regime to qualifying credit and relevant consumer credit1, see PERG 8.17.17 G.