UK: FCA announces crackdown on high-interest lending

The changes proposed by the Financial Conduct Authority (FCA) are designed to create a “rebalancing in favour of the customer,” reported the Financial Times. The watchdog is proposing massive reforms following a wide-ranging review into the market, including bank overdraft charges, rent-to-own, doorstep lending, catalogue credit and store cards.

The FCA said  claims forcing banks to give more transparent information about overdrafts would save customers more than £200 million (US$266million) a year. The regulator announced it would consider more fundamental changes in future, such as a ban on fixed fees and ending distinctions between unarranged and arranged borrowing costs. Andrew Bailey, FCA chief executive, said: “We’re giving a very strong message that this does need to be dealt with.”

But some campaign groups criticised the regulator for moving too slowly. Gareth Shaw, of consumer association Which?, said it was “wrong that the regulator continues to delay taking action,” while Mick McAteer, co-director of the Financial Inclusion Centre and a former FCA board member, said, “I just don’t get why the FCA are not taking tough action now.”

Full Content: Financial Times