To ask the Chancellor of the Exchequer, what assessment he has made of the potential merits of introducing an anti-usury law to cap interest rates and give borrowers more protection.
Answered on
7 May 2019
On 1 April 2014 the Government transferred regulatory responsibility for consumer credit from the Office of Fair Trading (OFT) to the Financial Conduct Authority (FCA). The FCA proactively monitors the market, focusing on the areas most likely to cause consumer harm. The Government has given the FCA the power to cap all forms of credit, and the FCA can do so if it thinks it is necessary to protect consumers.
The FCA introduced a price cap on the cost of payday lending in 2015, and more recently introduced a price cap on rent-to-own which came into force on 1 April 2019. The Government has strong concerns about the practices that the FCA has identified in the rent-to-own market, and welcomes the FCA’s decision to introduce a price cap.
The FCA has said that it will keep the issue of capping the cost of credit in other markets under review.