Chancellor Rachel Reeves’ intervention in car loans case rejected | Global News Avenue

Prime Minister Rachel Reeves’ attempt to intervene in a landmark case with controversial auto loans has been blocked by the UK Supreme Court.

The Supreme Court is scheduled for the April case to determine whether lenders should clearly tell customers how much commission they earn from selling a car loan.

The appeals court ruled last year that lenders should be clearer, but lenders appealed the ruling in April’s case.

The Treasury attempted to intervene due to concerns that the ruling would reduce the availability of auto loans. It told the BBC it respected the Supreme Court decision on Monday to block its intervention.

The vast majority of new and many used cars are purchased through financial agreements.

In 2021, the Financial Conduct Authority (FCA) prohibits dealers from receiving commissions from lenders based on interest rates charged to customers. It said that this provides momentum for buyers to charge interest rates that are unnecessary than local.

Since January, it has been considering whether to pay compensation to those who have reached these deals by 2021.

This creates prospects for banks and other lenders that must pay out a total of millions of pounds.

Last month, a court of appeals rule expanded the net for those who could receive compensation.

Some analysts estimate that in the scandal, the total payment could reach £30 billion, which could ultimately be the largest compensation plan for financial products since the Out-of-Payment Protection Insurance (PPI) SAGA.

The government said last month that while it wants to ensure customers redecorate, it also hopes that the automotive industry will continue to “support millions of drivers to own vehicles.”

At the time, it expressed concerns that the size of lenders’ compensation bill could undermine the competitiveness of UK banks.

“We respect the court’s decision not to approve our application for intervention … and will monitor closely,” a Treasury spokesman said on Monday.

The court also rejected the application case to intervene from consumer voice (remuneration consultants) and trade agency “Financial and Leasing Association).

It approved applications from the FCA and the National Franchise Dealers Association of Trade Institutions.

The court has limited time and therefore sometimes rejects interventions from parties that it believes may provide similar evidence.

Stocks of the British bank involved in the case fell on Monday, with Lloyds Banking Group down 4% while Close Brothers Group down nearly 15%.