No Cap On Payday Loans Mar 21, 2013Views: 1067
The government rejected a cap on payday loans interest rates after reviewing the economics of the situation.
While a new organisation being set up to regulate payday loans (The FCA) has the power to cap interest rates they are being advised by ministers not to utilise it and are citing the independent report conducted by Britsol University which didn't go as far as calling for a reduction in loan interest rates.
The government consider limiting APR as anti competitive (which it is) and also make a case for payday lenders in the UK leaving the UK for new foreign markets where they could get a better return on their investment.
The independent report commissioned by the government instead thinks that it would be a great deal more effective to tidy up the advertising practices of short term loan companies and clamp down harder and faster on payday companies that breach regulations.
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