Tuesday, 1 April 2014

"Warning for rogue payday loan firms"

From the BBC:

The Financial Conduct Authority (FCA) watchdog has warned it will "take out" payday lenders who do not follow stricter new rules. The FCA then narrowed its eyes and pointed directly at you with two fingers, using its thumb as an aiming sight.

The FCA is now muscling in on regulation of credit providers and debt management firms from the Office of Fair Trading.

'Rolled over'

The FCA wants to deal with extortionate charges, and the danger of borrowers being pushed into a cycle of debt. It is also taking over regulation of credit cards, and pointed out that this was a nice little hire purchase, debt management and debt advice business you had here, and that it would be a shame if anything happened to it.

'Seen to'

"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," Martin Wheatley, chief executive of the FCA, told 5 live.

"You get me?" he added, tapping his palm with a large spanner which had appeared out of nowhere.


Kj said...

The new regime is designed to force them to lend only to those who can afford it.

"What we are concerned about are the people who frankly shouldn't be lent to, who can't afford the loans and who then get rolled over and get pushed ever further into a debt cycle," said Mr Wheatley.

Funny about the different standards they apply to different kinds of debt isn't it?

Mark Wadsworth said...

Kj, no!

Debt to buy a house = good debt.
Debt to buy anything else = bad debt.

Because if people owe money for other things, they will find it difficult to borrow to buy a house.

Lola said...

Someone I know whose judgement is sound has met Wheatley and reckons he's a ****

JohnM said...

Meanwhile in page May 2014, we report on the discrimination faced by poor people: denied credit by the banks and forced to go to loan sharks.

Antisthenes said...

All these regulatory bodies have one thing in common and that is to make life easier for them and those they employ regardless of the damaging effects of their policies and practices have on the customers of those they regulate. Fewer providers means less numbers to police so by extension making life so much more easy for them. In effect they are responsible for the reduction in competition and therefore choice which leads to everyone having to purchase goods and services that are not of good quality or value for money. When will those who govern us learn that they have only one role and that is to keep us secure externally and internally so that all act honestly and fairly. Not to interfere with markets so that competition is reduced because it is only by a wide choice of providers will the customers be able to pick and choose to obtain that most benefits them.

Mark Wadsworth said...

L, I thought a post about FCA might cheer you up.

JM, a most excellent point - which is why the government shut down the "emergency loans for people on welfare" scheme, to drum up business for loan sharks.

A, another excellent point. The biggest firms love regulations really, they cost them a bit of money but they protect them from the competition.