One of the most contentious issues plaguing the payday loan industry right now is that of caps on the loans. These caps have been addressed and changed again and again over the last few years. The Financial Conduct Authority, the industry’s watchdog group, has been regulating the loans and putting caps in place, and there has been talk about altering the caps once more. When asked about any upcoming plans to change the caps, the Financial Conduct Authority (FCA) resided by saying that it had no intention of addressing the caps further at this time. It’s focus, according to EuroNews, is on car finance, at the moment. After making the changes there it intends, the focus may shift back to payday loans, but it is certain that the FCA is not finished dealing with the payday loan industry.
The over-watch organization has been working for years now to make changes to payday loans and the way they operate, and they have made it clear that they intend to make further changes. However, each new change takes time and requires an adjustment period, so consumers simply have to be patient while the organization does its work.
Every time a new change like lowered caps is pushed through, it sends ripples throughout payday loan industry. Lenders have to change up the terms of their payday loans or shift the way they do business. Many of them have moved into the online space, since having physical retailers across the UK is no longer feasible for them. Many lenders have left the industry entirely, closing up shop as their efforts to stay competitive failed. The changes to the industry guidelines imposed by the FCA has simply been too much for some lending companies to handle.
The payday loan industry has been an area of particular concern for the FCA over the last few years. They have repeatedly targeted high interest rates and fees, drastically reducing how much lenders can charge their clients for services. The loan caps have been addressed multiple times already, and it’s safe to assume that they will be addressed again.
While payday loans are seen as an essential and sometimes beneficial service for the UK’s economy by many financial organizations, the way that many payday lenders go about their business and the way they sometimes target the underprivileged has raised the ire of the public on more than one occasion and spurred the creation of the FCA in the first place.
There is still a lot of work to be done on payday loans, and consumers can expect to see more changes in the near future, but for now, they have to be content with what has already been done there and the state of the industry as it is. Payday loans are now much more customer friendly and less expensive than they have in the past, so those who need the money they provide can do so relative safety and without worrying too much that they are being taken advantage of.