LONDON, Nov 29 (Reuters) - The cap on interest rates charged on payday loans will be reviewed to see if changes are needed, Britain’s Financial Conduct Authority said on Tuesday.
The cap came into force in January 2015 after concern among lawmakers and the Church of England about the impact very high interest rates have on vulnerable people taking out short-term loans to tide them over until payday.
“The FCA will assess whether there is evidence that suggests that the cap should be changed. The FCA is also keen to see if there is any evidence of consumers turning to illegal money lenders directly as a result of being excluded from high cost credit because of the price cap,” the watchdog said in a statement.
The examiniation of the cap will be part of a broader review of “high cost credit” to see if any policy measures are needed.
Reporting by Huw Jones, editing by Rachel Armstrong