Justin Welby, the next archbishop of Canterbury, stated pay day loan companies charge “usurious” rates. Photograph: Mark Richardson/Alamy
The government has agreed to change the law to give the new Financial Conduct Authority (FCA) powers to set a cap on exorbitant interest rates charged on payday loans in a significant climbdown.
The next archbishop of Canterbury accused payday loan companies of charging “clearly usurious” rates, while the Treasury minister Lord Sassoon accepted the broad principles of a cross-party move to set a cap in the House of lords.
Sassoon told peers: “we must make sure the FCA grasps the nettle regarding payday lending and has now certain abilities to impose a limit regarding the price of credit and make certain that the mortgage may not be rolled over indefinitely should it determine, having considered the data, that here is the right solution.”
The federal government had been dealing with feasible defeat in the Lords over an amendment placed straight straight down by Labour peer Lord Mitchell which may have offered the FCA the energy to impose a computerized limit on interest levels charged.
Sassoon stated the federal government could maybe maybe not accept the amendment that is cross-party the us government would simply simply simply take an “evidence-based approach” to a limit after considering a brand new report on credit by academics at Bristol college. Read more