FCA caps payday loans
The regulator confirmed that borrowers will never have to pay back more than double what they originally borrowed after it imposed an initial cost cap of 0.8% per day on such loans.
Martin Wheatley, the FCA’s chief executive officer, said: “I am confident that the new rules strike the right balance for firms and consumers.
“If the price cap was any lower, then we risk not having a viable market, any higher and there would not be adequate protection for borrowers.
“For people who struggle to repay, we believe the new rules will put an end to spiralling payday debts. For most of the borrowers who do pay back their loans on time, the cap on fees and charges represents substantial protections.”
The FCA published its proposals for a payday loan price cap in July. The price cap structure and levels remain unchanged following the consultation.
The new rules come into place on January 2.