Banks

Barclays: life in the old dog yet

Barclays, a former basket case of British banking, is beginning to look inspiringly mediocre. The bank has failed Bank of England stress tests less resoundingly than Royal Bank of Scotland. Investors believe its assets are worth only 10 per cent less than their book value, judging from the share price. Although Barclays’s legal team have […]

Continue Reading

Currencies, Equities

Scary movie sequel beckons for eurozone markets

Just as horror movies can spook fright nerds more than they expect, so political risk is sparking heightened levels of anxiety among seasoned investors. Investors caught out by Brexit and Donald Trump are making better preparations for political risk in Europe, plotting a route to the exit door if the unfolding story of French, German […]

Continue Reading

Currencies

Dollar rises as markets turn eyes to Opec

European bourses are mirroring a tentative Asia session as the dollar continues to be supported by better US economic data and investors turn their attention to a meeting between Opec members. Sentiment is underpinned by US index futures suggesting the S&P 500 will gain 3 points to 2,207.3 when trading gets under way later in […]

Continue Reading

Banks

Basel Committe fail to sign off on latest bank reform measures

Banking regulators have failed to sign off the latest package of global industry reforms, leaving a question mark hanging over bankers who complain they have faced endlessly evolving regulation since the financial crisis. Policymakers had hoped to agree the contentious new measures at a crunch meeting held in Chile this week, but a senior official […]

Continue Reading

Banks, Financial

Banking app targets millennials who want help budgeting

Graduate debt, rent and high living costs have made it hard for millennials to save for a house, a pension or even a holiday. For Ollie Purdue, a 23-year-old law graduate, this was reason enough to launch Loot, a banking app targeted at tech-dependent 20-somethings who want help to manage their money and avoid falling […]

Continue Reading

Categorized | Financial

FCA considers tighter curbs on high-cost consumer credit


Posted on November 29, 2016

The UK financial watchdog is considering tighter controls on high-cost consumer credit, including payday loans, catalogue credit and pawnbroking.

The Financial Conduct Authority said on Tuesday it was looking for feedback about credit products as well as overdrafts as part of a crackdown that has put many payday lenders out of business.

The FCA initially pushed through a price cap on payday loans in January 2015, and said it would consider whether the cap should be changed or scrapped. The regulator was especially interested in whether consumers had turned to illegal lenders as a result of payday lenders closing.

However, in a separate report out on Tuesday, Citizens Advice, the consumer advocacy group, found no rise in illegal loans as a result of the tougher rules for payday lenders. The group, which helps consumers with debt problems, instead recorded a fall in the number of illegal loan cases in the past year.

Additional research from the Social Market Foundation found that while the new rules had caused the payday loan market to shrink — the number of loans sold in January to April 2016 was 42 per cent lower than in the same period of 2013 — costs for borrowers had also fallen.

The FCA first said earlier this month that it would also look to implement measures to improve transparency for overdraft users — including whether new rules are needed surrounding a so-called monthly maximum charge for overdrafts — following recommendations from the Competition & Markets Authority.

On Tuesday, the regulator, which first began regulating consumer credit in 2014, said it would “look in more detail at overdrafts from a consumer protection, as well as competition, perspective”.

Andrew Bailey, FCA chief executive, said: “This is a significant moment for our approach to consumer credit regulation as we continue to ensure that this market works well for consumers.

“As an organisation, we have already taken many steps to address the risk of consumer harm by putting in place new rules for high-cost, short-term credit firms and taking action against non-compliance across all credit markets.”

Citizens Advice has called for a cap on prices for so-called rent-to-own transactions, where people lease household products for a weekly or monthly rate, with the option to buy the product after a certain time.

The advocacy group is also pushing for caps on prices for logbook loans, where people borrow against the value of their car, and guarantor loans, which require loans to be co-signed by a second person.