Less than two months ago regulators warned against a payday loan cap
It's not been two months since the Financial Conduct Authority (FCA) released its consultation on payday lending – and recommended against a cap – and now politicians are attempting to bring one in. The FCA called such a proposal a "very intrusive proposition".
In October the FCA's "Detailed proposals for the FCA regime for consumer credit" the regulator warned that a price cap on the total cost of credit "could lead to prices increasing" – drifting towards the cap.
Alternatively, a cap could see "a significant reduction in lenders exercising forbearance." The FCA said that "neither of these … would be beneficial for consumers."