Attack on Pay Day Loan Industry Slows Loan Sharking in Britain
New regulations on payday lending companies in Britain has resulted in a stagnation or slow down in the payday lending industry there, according to numbers from the FCA (Financial Conduct Authority). After strict rules per imposed in April of this year by the FCA, approximately 100 of Britain’s top 210 have stop offering payday loans. That’s a huge decline.
“We have said before that firms would need to improve their operation or exit the market, and we are now seeing that happening,” said a spokesman for the FCA.
QuickLoans.co.uk, one of UK’s biggest payday lenders has already left the market, according to it’s recent announcement that it will stop offering payday loans because of the, “continuing, even increasing threats of political interference by the Governments.”
The same has been seen in the U.S. with federal government interference in lending under Dodd Frank with the creation of the CFPB (Consumer Financial Protection Bureau). But is government intervention the answer? Limiting the predatory lenders in the market by using blanket rules may protect consumers but it will also certain limit the overall availability of credit. Proponents of the FCA in Britain and the CFPB in the U.S., say these new financial regulations aimed at protecting consumers are long overdue and will end unnecessary abuses. Where do you stand on this issue? Is government intervention the answer?
(Source: Independent.co.uk: http://www.independent.co.uk/money/loans-credit/tougher-rules-turn-half-of-britains-210-payday-lenders-away-from-rapid-loans-9412937.html)
Posted by Corey Curwick Dutton
