Assessment of creditworthiness
5. After section 55A (pre-contractual explanations etc) as inserted by regulation 3, insert—
“Assessment of creditworthiness
55B.—(1) Before making a regulated consumer credit agreement, other than an excluded agreement, the creditor must undertake an assessment of the creditworthiness of the debtor.
(2) Before significantly increasing—
(a)the amount of credit to be provided under a regulated consumer credit agreement, other than an excluded agreement, or
(b)a credit limit for running-account credit under a regulated consumer credit agreement, other than an excluded agreement,
the creditor must undertake an assessment of the debtor’s creditworthiness.
(3) A creditworthiness assessment must be based on sufficient information obtained from—
(a)the debtor, where appropriate, and
(b)a credit reference agency, where necessary.
(4) For the purposes of this section an agreement is an excluded agreement if it is—
(a)an agreement secured on land, or
(b)an agreement under which a person takes an article in pawn.”.