MP claims payday loan controls do not go far enough (From East London and West Essex Guardian Series)
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Walthamstow MP, Stella Creasy, says new payday loan controls do not go far enough
New controls on high-cost payday lenders do not go far enough, according to MP Stella Creasy.
The Financial Conduct Authority (FCA) today announced that lenders will have to ensure borrowers can afford to repay their debt.
Customers will not be allowed to take out a new loan to pay off an existing one more than twice, under the measures.
The FCA has also vowed to research a possible cap on interest rates, which can be as high as £5,000 per cent.
Stella Creasy has long campaigned for restrictions on what she calls ‘legal loan sharks’, claiming they prey on the vulnerable and ruin lives.
Reacting to the new controls, which will come into effect in April, she said: “While I welcome the focus of the FCA on legal loan sharks and their research into capping, the lack of real action again today on the actual cost of credit itself will be a blow for many caught in a spiral of debt due to payday lenders.
“The measures the FCA announced today may go some way to limiting some of the damage being done, but they won’t prevent them like capping would.
“It’s the cost of credit itself which causes the problems in the first place to consumers.”
The FCA say its aim is to create a regime that protects consumers and allows businesses to operate at the same time.
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