The Financial Services and Markets Bill, introduced to Parliament in May 2026, formally begins the long-awaited overhaul of the Consumer Credit Act 1974 (CCA). It aims to repeal the CCA’s prescriptive rules and shift to a more flexible and modern regime based on conduct requirements developed by the Financial Conduct Authority (FCA).
The Bill introduces the reforms to the CCA that were set out in HM Treasury's policy statement published on 18 May 2026 (you can read more on the HMT’s final policy on CCA reform in our previous article here) . Part 1 of Schedule 1 makes amendments to the CCA. It repeals provisions related to information disclosure requirements, sanctions, and certain other rights and protection, where the Government considers robust protection could be achieved through the FCA regime. Part 2 of Schedule 1 makes minor and consequential amendments to other enactments as a result of the changes brought about by this Bill. Detailed transitional provisions will be necessary for CCA agreements which were entered into before and continue after the new regime comes into force. The Bill therefore confers a power for the Government to make transitional provisions by secondary legislation.
This article provides an update on the Bill’s progress and highlights the key themes emerging from the House of Lords’ (HoL) debates on the legislative proposals for CCA reform.
Passage of the Bill
- The Bill was introduced in the House of Lords, with First Reading on 19 May 2026.
- Second Reading followed on 8 June 2026, when peers debated the Bill’s overall purpose and principles, and highlighted areas where they consider amendments are needed.
- The Bill entered Committee Stage on 22 June 2026 for detailed, clause‑by‑clause scrutiny. The final Committee sitting took place on 8 July 2026, after which the Bill will move to Report Stage for further examination and amendment. This is due to commence on 7 September 2026.
Emerging themes in relation to CCA Reform
Following Second Reading, an amendment was tabled challenging Clause 1 of the Bill and the proposed transfer of significant elements of the remaining CCA framework into FCA rules. A further amendment was tabled seeking to preserve a statutory “floor” of rights, whilst allowing the FCA to modernise the form and content of the regime – for example by retaining statutory notices of arrears and default sums and the associated unenforceability sanctions.
None of the proposed amendments relating to CCA reform were moved to a vote at Committee Stage; all were withdrawn following the Government’s submissions. However, they could re-emerge at a later stage.
Here are some common themes that emerged from the Lord's debates on the CCA reform:
- Concerns About Loss of Parliamentary Scrutiny and Oversight: Although there was broad agreement that the CCA is outdated and in need of reform, there was anxiety amongst critics that transferring consumer credit protections from primary legislation into FCA rules reduces the role of Parliament in setting and scrutinising these protections. The move is seen as shifting significant power from Parliament to regulators, particularly the FCA, with little clarity or detail, at this stage, on what will replace repealed statutory provisions.
- Risks to Consumer Redress and Certainty: There was concern that the new regime may make it harder for consumers, especially those who are less financially literate, to know and enforce their rights. Some felt that a shift to regulator-led rules may reduce certainty for consumers about when and how they are entitled to redress.
- Potential for Reduced Consumer Protection: The move away from statutory rights is seen as potentially weakening consumer protection, particularly if enforcement sanctions are removed without equivalent replacements and if the Consumer Duty is relied upon as a substitute for statutory obligations.
- Questioning the True Benefit of Deregulation: While some welcomed the principle of deregulation, there was a warning that simply thinning the statute book does not necessarily reduce the regulatory burden on firms or improve outcomes for consumers. The key test should be whether the reforms genuinely lessen burdens and maintain or enhance consumer protections.
- Impact on Vulnerable and Excluded Groups: There was a particular emphasis on the risk that the reforms could further disadvantage financially excluded or less literate consumers, who may already struggle to access credit and secure redress.
- Main industry/legal certainty objection: There was concern over ambiguity, long-tail liabilities, retrospective exposure and insufficiently defined replacement rules.
- Main Government response: Despite the concerns raised during debates, the Government’s position is that reform is needed to modernise an inflexible, outdated framework and the FCA is the appropriate body to hold most of the operative rules.
- Statutory limitation for s140A claims: An amendment was tabled, and subsequently withdrawn, seeking to introduce a statutory limitation period for claims under section 140A of the CCA. This was in light of potential implications arising from the recent Zedra judgment, in which the Supreme Court held that unfair prejudice petitions under section 994 of the Companies Act 2006 are not subject to statutory limitation periods. The amendment was withdrawn following assurances from the Government that the Government’s position remains that the limitation period for section 140A claims runs from the end of the credit agreement, and that the Zedra judgment does not affect that position.
Next steps
Regardless of the House in which it is introduced, a Bill must pass through the same stages in both chambers before receiving Royal Assent and becoming an Act of Parliament. In practice, this means it is likely to take approximately 8–12 months in total for the Bill to complete its passage through Parliament and be enacted. At this stage, the timetable for future consultation on the new FCA regime remains uncertain.
