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FCA proposes price cap for payday lenders - Consulting now, Effective 1/1/2015


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http://www.fca.org.uk/news/fca-proposes-price-cap-for-payday-lenders

 

The FCA’s key proposals are as follows:

 

1. Initial cost cap of 0.8% per day. For new loans, or loans rolled over, interest and fees must not exceed 0.8% of the amount borrowed. This lowers the costs for those borrowers paying a daily interest rate above the initial cost cap.

 

2. Fixed default fees capped at £15 – Protects borrowers struggling to repay. If borrowers cannot repay their loans on time, fees must not exceed £15. Interest on unpaid balances and default fees must not exceed 0.8% per day of the outstanding amount.

 

3. Total cost cap of 100% - Protects borrowers from escalating debts. Borrowers must never have to pay back more in fees and interest than the amount borrowed.

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http://www.fca.org.uk/news/fca-proposes-price-cap-for-payday-lenders

 

The FCA’s key proposals are as follows:

 

1. Initial cost cap of 0.8% per day. For new loans, or loans rolled over, interest and fees must not exceed 0.8% of the amount borrowed. This lowers the costs for those borrowers paying a daily interest rate above the initial cost cap.

 

2. Fixed default fees capped at £15 – Protects borrowers struggling to repay. If borrowers cannot repay their loans on time, fees must not exceed £15. Interest on unpaid balances and default fees must not exceed 0.8% per day of the outstanding amount.

 

3. Total cost cap of 100% - Protects borrowers from escalating debts. Borrowers must never have to pay back more in fees and interest than the amount borrowed.

 

Hi

 

Very interesting proposals and not before time is an understatement

 

But we shall have to wait and see as 'time passes by' so to speak

 

In the meantime the PDLCs will probably be pencilling more team meeting dates in their diaries, the agenda may include how best they can continue to 'help' people

 

The FCA? well, it has to be said that they are looking the part and appear to be making a difference, the OFT? can you remember them?

 

My view

 

W

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Hi

 

Very interesting proposals and not before time is an understatement

 

But we shall have to wait and see as 'time passes by' so to speak

 

In the meantime the PDLCs will probably be pencilling more team meeting dates in their diaries, the agenda may include how best they can continue to 'help' people

 

The FCA? well, it has to be said that they are looking the part and appear to be making a difference, the OFT? can you remember them?

 

My view

 

W

 

 

 

W,

 

I think you could be right.

 

The FCA have certainly shown their teeth the last few weeks with Wonga, Dollar and WDA all being on the end of an old fashioned “shoeing”. I would hope more are in the pipeline.

 

PDL’s changing their business models? Some might, some I can see having a fire=sale between now and 1/1/15 with an increase in inflated/unfair charges being applied before handing back their licence.

 

OFT were ultimately disappointing and couldn’t fulfil their mandate. The FCA? Well, they certainly seem a “proper regulator”?

 

Best wishes.

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