(This note is not part of the Instrument and does not purport to be a legal interpretation.)

These regulations transpose into domestic law the provisions of the Consumer Credit Directive 2008/48/EC of the European Parliament and of the Council on credit agreements for consumers. That Directive establishes a harmonised legal framework in the European Union for the provision of consumer credit ranging from €200 to €75,000. It does not apply to mortgages. It replaced a 1987 Directive (87/102/EEC), which laid down minimum rules for consumer credit agreements within the EU and which was transposed into domestic law by the Consumer Credit Act 1995.

The Regulations have the following benefits for consumers:

• Standardisation of pre-contractual information through the use of the Standard European Consumer Credit Information form (SECCI) and standardisation of the information to be contained in a credit agreement.

• The Annual Percentage Rate of charge (APR) will be more transparent and will include all known costs and assumptions used in calculation. This will provide an effective tool for comparisons between loans offered by creditors.

• Consumer Protection will be enhanced through more adequate explanations, creditworthiness checks and credit history checks.

• In the case of credit intermediaries, all fees and ties with the credit provider must be provided for in the advertising and in the documentation provided to the consumer. The fees for the credit intermediary must also be included in the APR quoted to the consumer.