Castle Point MP Rebecca Harris has welcomed the planned clampdown on payday lenders preying on their customer. Announced by the Financial Conduct Authority (FCA), the UK’s independent financial regulator, the proposals will ensure that the overall cost of a loan should never exceed 100% of the original amount borrowed. This would mean that someone who borrowed £100 could only end up repaying no more than £200. Late payment fees will also be capped at £15. The proposals are likely to be introduced from January 2015 and are designed to curb the problem of spiralling debt.

Rebecca has been campaigning for proper regulation and enforcement of payday lenders in Parliament. This included co-sponsoring the High Cost Credit Bill last year, which proposed to introduce further controls on high cost credit companies i.e. payday loan companies. The Bill would, amongst other things, have restricted the amount of high-cost credit that can be advanced and restrict ‘rollover’ and repeat lending, but did not make it through the House of Commons.

As a member of the Business, Innovation and Skills Select Committee, Rebecca has also looked into how the FCA and Government could more effectively regulate payday loan companies. The Committee heard from a range of representatives from payday loan companies to the Financial Conduct Authority. This followed on from the Committee’s inquiry into Debt Management in 2012.

The announcement is therefore particularly welcome for Rebecca, who commented:

“I have been calling for proper regulation and enforcement of payday lenders so that they cannot continue to exploit people, including people right here in Castle Point. I co-signed the High Cost Credit Bill that would’ve restricted the amount of high cost credit that can be advanced. As a member of the BIS Committee I have also been active in calling for the Government to ensure proper regulation of payday lenders.

Therefore I am delighted with the FCA’s announcement that they will be bringing in a cap on payday lenders. This as a real step forward for preventing more people in Castle Point from getting into spirals of debt.”