Consumer Credit Regulation Nick McBride Senior Advisor Ministry of Consumer Affairs Wellington New Zealand E-mail: email@example.com Introduction Contracts for consumer credit are the most complex of and potentially risky transactions that consumers enter into, both because of informational disadvantages faced by consumers and the consequences if the transaction fails. In recent times, attitudes to credit and economic conditions have changed with the result that credit transactions – and levels of personal debt – have risen markedly in many countries. Economic and technological change has increased the choice available to consumers as well as the technical complexity of credit products. In this environment, there is an essential need for a robust regulatory framework to govern the borrowing and lending transaction. Sound credit regulation has proved very difficult to design, but fortunately, there are many lessons that jurisdictions can learn from the efforts of other countries – both historical and current. The most recent effort to reform consumer credit law that I am aware of is the one that I have been involved with: New Zealand’s Consumer Credit Bill.1 In developing the Bill, we paid close attention to reform efforts that had taken place in other countries, in particular Australia, but also Canada, the UK and the USA. I understand that consumer credit reform has been tagged as a priority for consumer law reform in some Asian countries, and that in many respects existing law is outmoded and behind equivalent statutes in some Western countries. This paper aims to: Provide a context to consumer credit law reform in New Zealand and the other jurisdictions. Highlight similarities and differences between jurisdictions, and the reasons for those differences. Discuss the differing objectives of consumer credit law. Given the context, explain the background to some of the policy choices underlying the Consumer Credit Bill. Make a few subjective observations based on my involvement in consumer credit law reform and what I have learned in New Zealand and elsewhere. It is hoped that this will serve as a useful perspective for others contemplating or embarking on consumer credit reform. Of course, I realise that cultural, historical, and institutional factors, make every context different, and that countries have different public policy objectives in respect of consumer credit law. However, in New Zealand we benefited greatly from the experiences of others, and we hope to be able to pass something on in return. A brief history of consumer credit regulation This section provides a basic overview of the consumer credit regulation in each country, before highlighting and explaining some of the differences. US: The Truth in Lending Act template The “grandfather” of all the modern Western consumer credit statutes is the United States Truth In Lending Act (TILA). Conceived in the early 1960s, it has been in force since 1969, although heavily amended on a number of occasions, most notably by the Truth in Lending Simplification Act in 1980.2 TILA has served as the template for all the consumer credit statutes that follow. Its basic features are:3 Application to virtually all forms of borrowing for consumer purposes, including sale and loan credit.4 Detailed disclosure obligations upon lenders. A standardised method for calculating and disclosing the finance charge as a percentage rate per annum (the “APR”). Specific penalties against lenders, recoverable by consumers, for breaches of the legislation by lenders. There have been many criticisms of aspects of TILA. Among the more significant include doubt as to the utility of its required disclosures, in particular whether they are in a form, or received at the right time, so that consumers can use them in the credit shopping process.5 Another problem specific to the TILA regime is that through the process of amendment, as well as the associated regulations and staff commentaries, it has become hugely detailed and complex with the number of rules covering many pages of text. One reason for this is because the basic structure of the Act has never been revised, despite being designed for conditions prevailing in the 1960s. Instead, regulators and the courts have tried to keep up by constantly adapting the subordinate regulations and guidelines to changing conditions. Nevertheless, the leading authority on TILA, Professor Ralph Rohner, concludes that TILA is and an important and, by and large, successful statute and will remain in place for the foreseeable future.6 Commonwealth countries England had in place usury laws from at least medieval times. These laws reflected religious proscription of lending money at interest and consequent social disapproval of the practice. Usury laws were repealed in 1818. Following evidence of abuse by moneylenders, the Moneylenders Act was passed in 1900. The key features of the Moneylenders Act were the establishment of a licensing regime for moneylenders, and court powers to overturn harsh and unconscionable conduct by lenders. An amendment in 1927 established a presumption that interest rates over 48 percent were unconscionable. Sale credit, such as hire purchase contracts, did not fall under the Moneylenders Act. Hire purchase is also treated as different from loans by the common law. Therefore, separate hire-purchase legislation was developed. New Zealand and Australia did not have usury laws in place. Both countries (in Australia’s case, on a state by state basis) enacted versions of the Moneylenders Act (including the 1927 amendment) and the Hire Purchase Act. 1970s and 1980s reform Influenced by the debates concerning the TILA (and by Article 9 of the US Commercial Code, which overhauled the laws on personal property securities) Australia, the United Kingdom, Canadian states and New Zealand all appointed law reform committees to examine and report on the state of consumer credit law. Perhaps the most notable of these reports was the report of the Crowther Committee in 1971, which summarised the themes that to varying degrees were shared in the other reports. It criticised the state of the law in England (which applied in New Zealand and Australia), by pointing out that:7 Credit transactions were legally governed according to form, not substance, leading to artificial distinctions and excessive technicality. The classic example is that a hire purchase contract where the seller retains title in the goods is legally different to a sale contract with a mortgage back to the seller, yet in substance the transactions are equivalent. There was a failure of the law to sufficiently discriminate between credit transactions entered into for business purposes and consumer purposes. Credit law had become outmoded and unsuited to modern commercial conditions. By the mid 1980s, New Zealand, most Australian states, the United Kingdom and Canadian states had all enacted consumer credit statutes. Despite various significant differences they were all based on the TILA template. The present position As mentioned, the TILA remains in force, and it is unlikely to undergo substantial revision in the near future.8 The United Kingdom’s Consumer Credit Act 1974 is also likely to continue in its present form for the foreseeable future, particularly as it forms the basis of a 1987 European Union directive, which all EU states are expected to comply with. The UK regime is also distinguished by excessive complexity, particularly concerning methods for calculating the APR on a credit contract. Under the aegis of its Uniform Law Conference, Canada has attempted to encourage all provinces to enact a model Cost of Credit Disclosure Act. The model Act sticks with the TILA template in key respects.9 Once adopted by provinces, the Act replaces older “first-generation” consumer credit statutes. Australian states were among the last10 to adopt modern consumer credit statutes, and the first to replace them. Because of their poor drafting, excessive complexity, economic inefficiency,11 and the often disproportionate penalties that lenders incurred for breaches – both minor and technical, as well as serious – the Credit Acts adopted in the mid-1980s were replaced in 1994 with the Consumer Credit Code.12 Lately, the Code has been amended to capture the operations of “payday” lenders who, due to an exemption for short term credit, fell outside the provisions of the Code. Payday lending is distinguished by short-term loans at high rates and is often perceived as unfair.13 In New Zealand, the Credit Contracts Act was adopted in 1981. While it has been relatively successful in comparison with its overseas counterparts, it (along with the Hire Purchase Act 1971) is scheduled to be replaced by the Consumer Credit Bill. It is interesting to note that, with the exception of the UK and USA, all the other states and countries mentioned above have replaced and up-dated (or are in the process of doing so) their original consumer credit regime. My impression is that the political systems in the UK and the USA do not really facilitate law reform quite so easily, despite the case for consumer credit reform in both countries. Factors influencing law reform The countries described above have market economies and similar legal systems, and credit transactions are fundamentally the same despite the setting. Therefore it is unsurprising that the legislation is similar. Moreover, from a law reformer’s perspective it saves time and effort to adapt a successful precedent. Nevertheless, differences inevitably result. Some of the more important factors are: Existing legislation Much law reform builds on and adapts existing frameworks rather than making wholesale change. This is particularly likely when moving from a first generation consumer credit regime to a second generation. The transition to the new regime becomes easier and uncertainty is reduced if something is kept from the old regime. Institutional and political environment for law reform Some countries are able to introduce far-reaching or significant reform measures because the law reform machinery supports this. For instance, in New Zealand the Consumer Credit Bill would not have been developed if it consumer credit policy was not the responsibility of a dedicated consumer affairs agency. When credit policy was housed within a larger, multi-purpose department, the prospect of reform was remote.14 It may also depend on timing and luck – eg having a sympathetic minister with influence within the government. In other cases, more gradual or modest proposals may be the best that can be achieved. Similarly, the dominant philosophy of the government may not be sympathetic to consumer protection for a variety of reasons. Power of pressure groups Pressure group pressure is part of the political an institutional environment. The outcome of consumer credit regulation can depend on the influence of pressure groups. For example, banks have a lot of influence, whereas small-scale consumer lenders, often derided as “loan sharks”, have less. The power of the organised consumer movement is also critical. Australia, in my view, has a vocal and influential consumer movement and is often able to see its agenda directly translated into policy and legislation: examples include new measures on payday loans, comparison rates and “overcommitment”. By contrast, New Zealand’s consumer lobby is more laid back, or in some cases has different concerns, and regulators have not come under pressure to enact similar measures. Cultural attitudes to credit and debt It is common to encounter deep seated unease with credit and debt. In Western societies, this may be traced back to biblical injunctions against usury and historical proscriptions on lending. Aristotle and Marx also condemned lending at interest. In Islam too, there are religious injunctions against usury. This attitude can support regulation that restricts creditors activities, such as interest rate caps. In other cases, access to credit is regarded as a “right”. This may be the case in the US, which has amended TILA to prohibit discrimination in the granting of credit and which has enacted the Community Reinvestment Act to improve access to credit in poor neighbourhoods. Technological development At the time early consumer credit statutes were developed and implemented, many lenders used manual systems to set up and administer credit contracts. Legislation accordingly accommodated such systems, for instance by allowing various approximate methods of calculating balances on loans that, while not strictly accurate, were easy to calculate by hand or by reference to tables. A well known example of this is the Rule of 78.15 In modern times, however, almost all lenders are computerised. New Zealand and Australian legislation assumes all lenders are – or can become – computerised and no longer accommodates manual practices. The reason for this is because manual systems often lead to unfair results. Computerisation removes a barrier to information flows from lender to consumer (eg, it becomes reasonable to require lenders to make certain calculations at different points of the loan because they can be done efficiently and cheaply by computer). Objectives of consumer credit law Different approaches to consumer credit also result depend on the objectives that are hoped to be achieved by the legislation. The objectives of New Zealand’s Consumer Credit Bill are fairly conventional and can be summarised as follows:16 Efficient, functioning consumer credit markets. Consumer credit regulation is necessary to deal with failures in the credit market, in particular information failures. Improved the information available to consumers about the cost and the terms of credit, and which facilitate positive choices by consumers while reducing the chances that they may be misled. Prevention of oppressive conduct by lenders. Most consumer credit statutes have provisions providing the Courts with remedies in response to unconscionable conduct by lenders. Australian provisions would appear to be the most comprehensive. Other functions of credit legislation found in different statutes include: Occupational regulation – control over which persons are permitted to provide credit. A key feature of the UK Consumer Credit Act is its licensing regime for credit providers. Prevention of overindebtedness – this is an important focus of Australian consumer credit law but is not found in other statutes. Restriction of creditors’ remedies – many statutes place restrictions on the amount of security a creditor may take and the techniques that may be used to recover debts – although in other jurisdictions such rules may be contained in personal property securities legislation. Consumer credit and the poor An interesting question is whether consumer credit is the correct vehicle for income redistribution or improving the position of poor consumers The conventional view is that expressed by two eminent authorities on consumer credit law. Professor Roy Goode, writing in the UK, said: “Consumer credit legislation, although often associated with the protection of the indigent, is in truth neither designed nor equipped for the special needs of the low income consumer. There is nothing in consumer credit legislation can do to provide the consumer with a good job, a reasonable income or a roof over his head”. 17 Similarly, Professor Ralph Rohner in writing about things that consumer credit legislation cannot do notes that “it certainly cannot fix the economic disabilities of the poor”. 18 An alternative viewpoint is put forward by Professor Iain Ramsay who critiques comments such as those above, and their variants from the influential law and economics movement. Ramsay, following some European theorists, argues that as well as promoting a primary role for consumer credit as a redistributory mechanism, consumer credit regulation could supplement the welfare state in offering security against unemployment and illness. This proposal “may influence the development of the law by injecting discussion of unemployment and social division into the world of contract doctrine and texts”.19 This is a radical proposal which is unlikely to become widely influential. Certainly, it would be difficult to reach a consensus between financial interests and consumers that consumer credit law should adopt the goals of the welfare state. However, it is possible to implement measures to deal with particular lending practices which harm low-income consumers. Good examples are by outlawing the rule of 78, controlling non-interest charges offered by lenders, by standardising the methods used to calculate interest, and through a good public enforcement mechanism to deter fraud and unfair practices by sub-prime lenders which overwhelmingly impact on low income people. An overview of the New Zealand Consumer Credit Bill This section briefly explains some of the policy choices enacted in the Consumer Credit Bill. Before dealing with the Bill, it is necessary to briefly describe what the Bill replaces. Background As mentioned above, New Zealand enacted the Money Lenders Act and a Hire Purchase Act (in 1939 and 1971). In 1977 a law reform committee recommended the law be overhauled and in 1981 the Credit Contracts Act was passed. The key reforms brought about by the Credit Contracts Act were: Removal of the requirement for lenders to be licensed. Extension of regulation to cover business loans up to a value of $250,000. The removal of many artificial distinctions based on form over substance. Nevertheless, the Hire Purchase Act was kept in place for hire purchase and conditional sale contracts. Disclosure obligations on lenders, including the requirement to calculate and disclose an APR (called a finance rate in New Zealand). Wide ranging powers for the Court to reopen oppressive contracts. In fact, at the time, this was seen as more important than the disclosure provisions. Civil penalties that can be claimed against lenders that breach the legislation. The Consumer Credit Bill The Consumer Credit Bill follows and updates the TILA template. Its key features are described below. Restriction to contracts entered into by individuals primarily for consumer purposes. The Credit Contracts Act is exceptional in its extension to business contracts. Our conclusion now is that there is only a weak case for regulating commercial credit, and that the priorities of commercial debtors are different to those of consumer debtors, being more focused on cost and flexibility rather than protection. Reform of the disclosure requirements: The most notable reforms are extension of information disclosure requirements throughout the life of the loan (something made feasible because of computerisation of the industry), and removal of the requirement to disclose the finance rate (APR). Consumers also have rights of “request disclosure” and must receive details from creditors of changes made to the conditions of the contract. Substantive restrictions on the method used to calculate interest and on non-interest fees that may be imposed by lenders. One of the severest informational barriers faced by consumers in the credit market is the multitude of methods that lenders may used to charge and disclose interest on a loan. The traditional response has been to allow creditors to continue to use what ever method they want, but to also require calculation of the APR. In our view, the APR is a concept that has not translated into something useful for consumers.20 Following the Australian precedent, we abandoned the ARP in the Consumer Credit Bill. However, lenders are now restricted in the methods they use to calculate interest. For example, interest may not be charged in advance (ie, it must be earned before it is charged, thus among other things prohibiting “discount” interest and the rule of 78), and the amount of an interest charge must not exceed the amount arrived at by applying a daily interest rate to the outstanding balance for the day. As a result, it has also been necessary to restrict non-interest charges imposed by lenders. Otherwise, lender’s will use such charges to avoid the restrictions on interest charging. The Bill limits non-interest charges to the lender’s actual and reasonable costs. Again, this policy depends on the financial industry being computerised. Simplification of the civil remedies that may be claimed by borrowers against debtors and providing for public third-party enforcement The Credit Contracts Act relied on consumers themselves to take action against lenders in breach of the Act. This is known as “self-enforcement” and proved totally unrealistic – consumers lack the incentive and the wherewithal to take action against lenders. While lack of enforcement is not a problem in the competitive end of the market – because breaches are rare – it gives lower-end lenders the confidence to breach the law with impunity, at significant cost to lower income borrowers. This contrasts with the situation in the US and Australia where, because of differences in the institutional environment,21 enforcement against lenders is common. However, in many cases claims are based on technical breaches with the consumer’s loss being insignificant, and merely frustrate legitimate debt-collection by creditors. An effective third-party enforcement offers a preferable solution to both of these situations, while still allowing consumers to take action themselves. It has the support of both lender and consumer interests. However, it must have sufficient resources to be effective. Some conclusions Based on my understanding of the history of consumer credit and recent reform efforts, I would like to offer a series of subjective conclusions which may be useful to those in other jurisdictions embarking on or contemplating consumer credit reform. Substance over form One of the important and long-lasting achievements of the first generation consumer credit statutes was to remove long-standing, artificial technicalities based on form over substance. Before such reform, drafters of contracts would be preoccupied with the avoidance of regulation, with the consequence that consumer understanding was impeded and retailers and lenders became excessively dependent on legal advice.22 The importance of compliance and enforcement It matters little how elegant a statute is drafted, or how substantial the rights it confers on consumers, if lenders lack the incentive to comply with it. In our experience, lenders operating in competitive markets, and who are concerned with their reputation, will make genuine efforts to comply with the law. Where such conditions are lacking, non-compliance is a problem. It is simply unrealistic to expect consumers to take action themselves in sufficient numbers to discipline the market – at least in the absence of a system that facilitates class actions. Enforcement becomes more important when lenders have a strong incentive not to comply with the law. For instance, if interest rate caps are in place, historical evidence suggests that lenders will find ways around them, eg through inflated non-interest charges and other devices. If a policy such as interest rate caps was to work, there would have to be a lot of emphasis given to enforcement. Broad court powers in response to unconscionable conduct by lenders are inadequate In New Zealand, the Courts have set a high threshold before determining conduct to be oppressive – too high to catch the routine unfair practices of many lenders. In addition, there are high transaction and financial costs for consumers taking court action to claim the remedies. Unconscionability provisions are useful to deal with the really “hard” cases that make it to court, but otherwise offer limited protection. Australia’s detailed unconscionability sections have been heavily criticised by the Professor Duggan, Australia’s leading authority on consumer credit.23 Credit law is not necessarily the appropriate vehicle for reducing consumer debt Credit and debt are often referred to in the same breath, but consumer credit law is not a vehicle for reducing personal debt. Rather it seeks to better inform consumers so that they have an understanding of their commitments, are better able to seek out credit deals on terms they desire and are treated fairly. Australian statutes have tried to make lenders take some responsibility for overindebtedness of borrowers, for instance, a contract may be reopened if the creditor can be shown to have not properly assessed the ability of the borrower to repay. In New Zealand we rejected such measures for reasons of principle and practicality. Reasons for this include the extra uncertainty it adds to the credit granting process and the absurdity of a rule which allows a debtor to apply for relief on the basis that the lender should not have believed his promise to repay his debt. We also sought to avoid measures which either implicitly or explicitly sought to deny low-income consumers credit. Referring back to discussion of consumer credit and the poor, we believe it is more useful to facilitate access to market opportunities, including credit, for low income people, rather than deny or restrict them. Measures to deal with consumer debt, in our view, are better dealt with by other policy instruments, such as the income support system, bankruptcy laws or education. Comprehensive coverage It was mentioned earlier that an exemption for short term credit (defined as credit provided for a period of less than 62 days) in Australia had allowed pay day lending to flourish. Recent amendments have brought pay day lending within the Code and officials are examining whether special rules should apply. In Canada, following a comprehensive report on the alternative credit market, Professor Iain Ramsay has recommended a “Model Deferred Deposit Loan Act”, to regulate that market.24 Our view is that the same rules should apply to all consumer credit transactions, with exemptions limited as much as possible. We consider that the same rules which apply to, say, home loans, can also apply to pay day loans. One reason why is because classification of different lenders becomes very difficult. There is obviously a trade-off with comprehensiveness because legislation designed for mainstream lenders may be too light-handed for marginal lenders, and legislation aimed at marginal lenders may impose unacceptable costs on the mainstream. Comprehensive legislation is likely to be weighted in favour of the interests mainstream lenders, however, a few basic rules relating to interest charges, disclosure etc, backed up by meaningful penalties and enforcement is likely to be a sufficient compromise.25 Substitution effects There is a well known risk with consumer legislation, particularly, credit legislation of market behaviour changing to produce unintended consequences or “substitution effects”. A good example is that if a particular class of consumers is denied access to credit – eg through interest rate caps – a black market may form to service those consumers, placing the consumer at much higher risk. It is easy to envisage similar effects if a statute was implemented that required lenders to become computerised if large numbers still used manual systems – depending on the ease and cost of becoming computerised. Disclosure vs regulation of terms Economists are likely to favour disclosure of the price and terms of credit contracts, rather than direct regulation of the terms, on the grounds that regulation of terms is likely to be inefficient.26 TILA is a disclosure statute, and the response to almost every problem that has arisen in the US has been more disclosure.27 We think some regulation of the terms concerning pricing methods used by lenders is justified, in particular, some standardisation of interest charging methods and some limited restrictions on non-interest charging. This is an area where disclosure is totally inadequate, with costs outweighing the benefit. Modern theory has given much more focus to the costs to consumers in becoming informed, pointing out that too much information, or information that is difficult to interpret, is counterproductive.28 The APR debate is another example of where the benefits of disclosure have been oversold. In regulating pricing methods, however, the challenge is to not restrict pricing flexibility of lenders by too great a degree. The risk is that lenders will be restricted in providing new products, or that cross-subsidisation will result. Both results harm consumers. However, pricing flexibility is not simply a matter of convenience for lenders: prohibiting the rule of 78 and add-on methods of interest charging (such as under the Australian Code and NZ’s Consumer Credit Bill) on instalment loans restricts pricing flexibilty, but does not prevent lenders from offering instalment loans (because other methods are available). Note: This paper contains my personal view and does not necessarily reflect the position of the Ministry of Consumer Affairs or the New Zealand Government. 1 A copy may be found at www.consumer-ministry.govt.nz/papers/papers_pdf/consumer-credit- bill.pdf 2 TILA supplements various state laws. In 1968, eight states adopted the Uniform Consumer Credit Code, and four adopted a revised version in 1974. The UCCC gives consumers additional rights to those found in TILA, including substantive restrictions on contract terms – notably following default by the consumer. 3 Other aspects covered in the legislation include credit card billing and reporting. 4 The Act applies to home loans, pawnbroker loans, credit sales, credit cards and cash loans. Leases are regulated under the Consumer Leasing Act, while “rent to own” contracts fall outside any regulatory regime. 5 One of the best critiques is Landers and Rohner “A Functional Analysis of Truth in Lending” (1979) 26 UCLA Law Review 711 6 Rohner “Whither Truth in Lending” (1996) 50 Consumer Finance Quarterly Law Report 114. 7 The report is concerned with issues relating to personal property securities as much as with credit. 8 Rohner, op cit, at n 6 9 Bowes, “Annual Percentage Rate Disclosure in Canadian Cost of Credit Disclosure Legislation” (1997) 29 Canadian Business Law Journal 183. 10 With the exception of South Australia, which passed the Consumer Credit Act in 1972, and Tasmania and Northern Territory, which never passed consumer credit statutes until the Uniform Consumer Credit Code in 1994. 11 Eg, the Credit Act 1984 (NSW) prohibited charges other than interest. This lead to cross- subsidisation and also limited competition because it restricted the ability of credit providers to offer new credit products 12 Duggan and Lanyon Consumer Credit Law, (Sydney: Butterworths, 1999), chapter 1. 13 Queensland Office of Fair Trading “Fringe" Credit Provider: A Report and Issues Paper, (May, 1999). 14 The Ministry of Consumer Affairs was formed in 1986 and took responsibility for consumer credit policy in 1998. From1981 to 1998 consumer credit policy was the responsibility of the Department of Justice, which was not able to give priority to credit law reform. 15 The Rule of 78 is a method of distributing “add-on” interest over the term of the loan. It apportions the interest and the principal component to each payment under a loan. However, it is only an approximation of the true actuarial rate, and tends to favour the lender by loading most of the interest to the front of the loan. 16 See McBride and Bowie, “The Goals of Consumer Credit Law: The Approach of the Ministry of Consumer Affairs to its Consumer Credit Law Review” (2001) 7(4) New Zealand Business Law Quarterly 329. 17 Goode (Ed) Consumer Credit (1978), cited in Ramsay “Consumer Credit Law, Redistributive Justice and the Welfare State” (1995) 15(2) Oxford Journal of Legal Studies 177. 18 Rohner, op cit, n 6. 19 Ramsay, op cit, n 17. 20 Ministry of Consumer Affairs, Consumer Credit Law Review Part 3: Transparency in Consumer Credit: Interest, Fees and Disclosure. Available at www.consumeraffairs.govt.nz/discussion_papers/dp_credit_transparency.html 21 For instance, because of rules concerning court cost awards and contingency fees, class actions in response to creditor breaches are feasible and attractive to many consumers and their lawyers. 22 Duggan and Lanyon, op cit, n 12. 23 ibid. 24 Ramsay, “The Alternative Consumer Credit Market and Financial Sector: Regulatory Issues and Approaches” (2001) 35(3) Canadian Business Law Journal 325. An earlier version is available online at http://strategis.ic.gc.ca/pics/ca/ramsayen.pdf. 25 McBride and Bowie, op cit, n 16 26 Most examples of regulation of terms relate to creditors remedies. 27 Eg following concerns about “high cost” mortgages, the US Congress added a new layer of disclosures in 1994 which apply in respect of such mortgages. 28 Hadfield, Howse and Trebilcock “Information-based Principles for Rethinking Consumer Protection Policy” (1998) 21 Journal of Consumer Policy 131.