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New powers to cap rates on payday loans

A new regulator will be given the power to cap interest rates charged by payday lenders. The firms offer loans at often very high rates of interest to workers who repay them at their next payday. Today the Treasury Minister Lord Sassoon told peers:

We need to ensure that the Financial Conduct Authority grasps the nettle when it comes to payday lending and has specific powers to impose a cap on the cost of credit and ensure that the loan cannot be rolled over indefinitely should it decide, having considered the evidence, that this is the right solution.

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