492		Banking regulation
		accused does not disclose the information or other matter to a constable or
		nominated officer, usually a money laundering reporting officer, as soon as
		practicable after he received the information.258 Since the introduction of the
		new section 21A, there have been no trials in which the section has been
		tested. A person does not commit an offence if he has a reasonable excuse
		for not disclosing the information or other matter or he is a professional
		legal adviser and the information or other matter came to him in privileged
		circumstances.259
		The 2001 Act also inserted section 21B into the Terrorism Act 2000, which
		created a defence of protected disclosures.260 In order for this defence to apply,
		three conditions must be met: (a) that the information or other matter disclosed
		came to the person making the disclosure (the discloser) in the course of a busi-
		ness in the regulated sector;261 (b) that the information or other matter causes
		the discloser to know or suspect, or gives him reasonable grounds for knowing
		or suspecting, that a person has committed an offence as outlined above under
		sections 15 to 18 of the Terrorism Act 2000;262 (c) that the disclosure is made to
	a constable or a nominated officer as soon as is practicable after the information
	or other matter comes to the discloser.263
		A new section 21ZA was inserted into the Terrorism Act 2000 in
		December 2007.264 This amendment permits people to undertake unlawful
		acts provided there is consent by an authorised officer and its aim is to facili-
		tate the discovery of offences. Section 21ZB aims to shield disclosures where
		such disclosures are made after a person has entered into such arrange-
		ments. Section 21ZC provides a further defence of reasonable excuse for not
		disclosing.
		Q7 Discuss the measures to combat the financing of terrorism.

10â Conclusion

The regulation of the banking sector in the United Kingdom has undergone a series of significant reforms since the 1980s. More recently, the regulatory effectiveness of the FSA has been questioned as a result of its ineffective performance The Coalition government have proposed to reform the FSA, though this has led to accusations by some commentators that this would merely result in a rebranding of the FSA.

The United Kingdom has adopted a tough stance towards combating the threat posed by financial crime and is largely fully compliant with its international obligations in relation to these matters.

258â Ibid. s.21A(4).â	259â Ibid. s.21A(5).â	260â Ibid. s.21B.
261 Ibid. s.21B(2).â	262â Ibid. s.21B(3).â	263â Ibid. s.21B(4).

264Terrorism Act 2000 and Proceeds of Crime Act 2002 (Amendment) Regulations 2007, SI 2007/3398.

493	11â Recommended reading

11â Recommended reading

Cartwright, P. ‘Retail depositors, conduct of business and sanctioning’ (2009) 17(3)

Journal of Financial Regulation and Compliance 302

Cranston, R. Principles of Banking Law (Oxford University Press, Oxford, 2002) Ellinger, E., Lomicka, E. and Hare, C. Ellinger’s Modern Banking Law (Oxford University

Press, Oxford, 2011)

Hsiao, M. ‘Legitimised interference with private properties: Banking Act 2009’ (2010) 25(5) Journal of International Banking Law and Regulation 227

Hudson, A. The Law of Finance (Sweet and Maxwell, London, 2009)

Mullineux, A. ‘The regulation of British retail banking utilities’ (2009) 17(4) Journal of Finance Regulation and Compliance 453

Stokes, R. ‘The banker’s duty of confidentiality, money laundering and the Human Rights Act’ (2007) Journal of Business Law (August) 502

Wadsley, J. and Penn, P. Penn and Shea, The Law relating to Domestic Banking (Sweet and Maxwell, London, 2000)

Part 7

Consumer Credit

Introduction

The seventh part of this book deals with consumer credit and is divided into two chapters. The first chapter outlines how the relaxation of the consumer credit legislative frameworks resulted in an increase in the availability of ‘convenient credit’, which is defined as ‘credit that is granted by the creditor with little or no reference to the creditworthiness of the debtor’. This chapter identifies several problems that have arisen from access to ‘convenient credit’, including record levels of consumer debt, financial exclusion and over-indebtedness; an increase in irresponsible lending practices and ineffective legislative protection of consumers. These have contributed towards a dramatic U-turn by the government towards promoting access to ‘affordable credit’. Affordable credit contains five basic elements: access to loans that are simple and transparent; lenders that are sympathetic towards low income consumers’ circumstances; simple loan application procedures; small loans over a short period of time; and affordable repayments. Chapter 1 then identifies several government initiatives aimed at promoting access to affordable credit, including the creation of the Social Exclusion Unit, the promotion of credit unions, the development of the Saving Gateway and the Financial Inclusion Fund.

Chapter 2 focuses on the Consumer Credit Act 1974 as amended by the Consumer Credit Act 2006. It begins by briefly highlighting the importance of the recommendations of the Crowther Committee on Consumer Credit 1971 and how it influenced the introduction of the Consumer Credit Act 1974. The second part of the chapter provides a general discussion of the aims and objectives of the Consumer Credit Act 1974 and comments on its scope and application. It then provides an overview of the interpretation of several important concepts and terms within the Act. The remainder of the chapter provides a detailed discussion of its main provisions and highlights the significant amendments introduced by the Consumer Credit Act 2006. In particular, the chapter concentrates on the interpretation of key phrases; the formalities of a consumer credit agreement; the cancellation of such an agreement; the pre-contract

496 Consumer credit

information obligations; the documentation of credit and hire agreements; credit advertising; credit licensing; and the unfairness test. The latter part of the chapter also considers the role and scope of the Financial Ombudsman Service; the increased enforcement powers of the Office of Fair Trading; and the impact of the Consumer Credit Directive 2008/48/EC.