The Financial Conduct Authority (FCA) has proposed restricting the amount borrowers using payday lenders can be charged in interest and fees, in a move which estimates suggest could cost providers £420m in revenues.
Proposals for a cap on payday lending mean that, from January 2015, charges and interest on new loans must not exceed 0.8% per day of the amount borrowed. Additionally, fixed default fees cannot exceed £15 and the overall cost of a payday loan will never exceed 100% of the amount borrowed. The proposals include when loans are rolled over. A survey of the existing market conducted by the regulator suggests that firms are currently generating revenues of between 1% and 2% per day from borrowers. It said it expects a price cap will have "a significant impact for many borrowers on the ...
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