Plans for a cap on the amount that payday lenders can charge their customers have been announced by the City regulator.
Payday loan rates should be capped at 0.8% a day of the amount borrowed, said the Financial Conduct Authority (FCA). And in total, no one will have to pay back more than twice what they borrowed. The payday industry said the changes - due in January 2015 - would mean more people turning to loan sharks. There will also be a cap on default charges, which is likely to be set at £15. "For the many people that struggle to repay their payday loans every year, this is a giant leap forward," said FCA chief executive Martin Wheatley. The FCA estimates that payday lenders will lose £420m a year as a result of the changes, or 42% of their revenue......Read more here