FCA guidelines could force quarter of payday loan providers away from company

FCA guidelines could force quarter of payday loan providers away from company

Andy Sharman and Emma Dunkley

Strict rules that are new pay day loans could force one fourth of loan providers away from business, in a move by the UK regulator to clamp straight straight down on “the period of debt”.

Martin Wheatley, chief executive associated with Financial Conduct Authority (FCA), stated the measures implemented today are made to “take away” elements of the industry that loan without doing any affordability checks and load expenses on to borrowers who “simply cannot pay”.

“We’ve estimated up to 25 % could keep, ” said Mr Wheatley. “We’d like companies to increase to the criteria but when they can’t, chances are they can keep the industry. ”

The FCA, which becomes regulator of credit today, estimates you can find 50,000 credit organizations which come under its widened remit, of which 200 are payday loan providers.

Mr Wheatley stated it will probe lenders on “how they make their funds, where they generate their cash” and whether “they can only just make their cash by abusing clients”. Continue reading