FCA promises tough action as it takes control of consumer credit
The Financial Conduct Authority has taken control of the consumer credit industry from today promising tough rules for short-term high-cost credit firms and debt management companies.03 April 2014
In its 2014 risk outlook, published yesterday, the regulator said its plans to enforce a price cap on payday loans may affect some firms' appetite to remain in the sector if profits are damaged.
Speaking on Radio 5 live this morning, chief executive Martin Wheatley said: "Our processes will probably force about a quarter of the firms out of the industry and that's a good thing as those are the ones that have poor practices."
The £200bn-a-year sector, previously the responsibility of the Office of Fair Trading, contains approximately 50,000 firms.
These include credit card issuers, payday-loan companies, pawnbrokers, log book lenders, peer-to-peer lenders, and debt management and secured loan providers and brokers.