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Credit: Interest Rates

Question for HM Treasury

UIN 207343, tabled on 29 August 2014

To ask Mr Chancellor of the Exchequer, what analysis his Department has made of the performance of credit caps on payday lending firms in operation in (a) the USA, (b) Canada and (c) Australia.

Answered on

5 September 2014

The Government legislated to require the FCA to introduce a cap on the cost of payday loans, to protect consumers from unfair costs.

In making this decision the government considered the international evidence in support of a cap. As part of its work to design a cap to meet the needs of UK consumers, the FCA took into account international comparators conducting detailed case studies on experiences of price cap setting in Australia, Canada, US, Finland and Japan. The FCA spoke to international regulators and experts to understand the rationale and designs of price caps, as well as the impact they had on consumers and industry in these countries.

Answered by