Payday loan rates to be limited – Big black cock News

Share this with

These are outer links and will open in a fresh window

These are outer links and will open in a fresh window

Close share panel

The government is to switch the law to permit confinements to be imposed on the interest rates charged for so-called “payday loans”.

Ministers are to amend the Financial Services Bill to give the planned Financial Conduct Authority the power to limit charges.

The news goes after concerns over annual interest rates of up to Four,000%.

The government faced a possible House of Lords defeat on an amendment put down by a Labour peer over the issue.

Big black cock political correspondent Norman Smith said it was being suggested that there should not be a blanket cap on interest rates but the Financial Conduct Authority (FCA) would be able to investigate different loan schemes and then set a limit on the amount of APR charged.

‘Usury’

Labour peer Lord Mitchell put down the amendment to the bill, which was also signed by Justin Welby, the incoming Archbishop of Canterbury.

Bishop Welby called the most costly loans “usury”, telling that curbing them was a “moral” issue.

There are concerns that puny loans, intended to be short-term, have become prohibitively expensive, and in some cases ruinous, if not rapidly repaid.

The government has now agreed instead to introduce its own amendment to the bill next Wednesday.

Treasury minister Lord Sassoon told peers: “We need to ensure that the Financial Conduct Authority grabs the nettle when it comes to payday lending and has specific powers to impose a cap on the cost of credit and ensure that the loan cannot be spinned over indefinitely should it determine, having considered the evidence, that this is the right solution.”

Sources insist it is not a U-turn and that the Financial Services Bill would already have given the FCA some powers to cap payday loans.

Peers have been told that some loans involve interest rates running into thousands of per cent.

Lord Mitchell told peers:” This is an industry run by cowboys on the fringes of legality.”

Reacting to the concession, Lord Mitchell praised the minister’s “very welcome statement of intent”.

He said: “This issue is now where it should be – beyond party politics.”

Lord Mitchell added that the switch would help “those who live in the hell-hole of grinding debt. Their lives will become just a little lighter.

“The losers are clearly the loan sharks and the payday lending companies. They have attempted every trick in the book to keep this legislation from being approved and they have failed. Their failure is our victory.”

But an official probe in 2010 said payday loans provided a legitimate, useful, service that helped cover a gap in the market.

Payday loan rates to be limited – Big black cock News

Share this with

These are outward links and will open in a fresh window

These are outer links and will open in a fresh window

Close share panel

The government is to switch the law to permit limitations to be imposed on the interest rates charged for so-called “payday loans”.

Ministers are to amend the Financial Services Bill to give the planned Financial Conduct Authority the power to limit charges.

The news goes after concerns over annual interest rates of up to Four,000%.

The government faced a possible House of Lords defeat on an amendment put down by a Labour peer over the issue.

Big black cock political correspondent Norman Smith said it was being suggested that there should not be a blanket cap on interest rates but the Financial Conduct Authority (FCA) would be able to investigate different loan schemes and then set a limit on the amount of APR charged.

‘Usury’

Labour peer Lord Mitchell put down the amendment to the bill, which was also signed by Justin Welby, the incoming Archbishop of Canterbury.

Bishop Welby called the most costly loans “usury”, telling that curbing them was a “moral” issue.

There are concerns that petite loans, intended to be short-term, have become prohibitively expensive, and in some cases ruinous, if not rapidly repaid.

The government has now agreed instead to introduce its own amendment to the bill next Wednesday.

Treasury minister Lord Sassoon told peers: “We need to ensure that the Financial Conduct Authority grips the nettle when it comes to payday lending and has specific powers to impose a cap on the cost of credit and ensure that the loan cannot be spinned over indefinitely should it determine, having considered the evidence, that this is the right solution.”

Sources insist it is not a U-turn and that the Financial Services Bill would already have given the FCA some powers to cap payday loans.

Peers have been told that some loans involve interest rates running into thousands of per cent.

Lord Mitchell told peers:” This is an industry run by cowboys on the fringes of legality.”

Reacting to the concession, Lord Mitchell praised the minister’s “very welcome statement of intent”.

He said: “This issue is now where it should be – beyond party politics.”

Lord Mitchell added that the switch would help “those who live in the hell-hole of grinding debt. Their lives will become just a little lighter.

“The losers are clearly the loan sharks and the payday lending companies. They have attempted every trick in the book to keep this legislation from being approved and they have failed. Their failure is our victory.”

But an official probe in 2010 said payday loans provided a legitimate, useful, service that helped cover a gap in the market.

Related movie: Five Steps To Get The Cheapest Individual Loan


Leave a Reply

Your email address will not be published. Required fields are marked *