Business Secretary Vince Cable has warned that regulating payday loans creates a risk of "letting the 'baseball bat brigade' into this industry" - apparently referring to loan sharks.
Speaking on BBC Breakfast, he said he supported the action being taken to cap charges, but added that it had to be "very, very carefully done".
There is evidence in both directions here. In the United States they have introduced caps on interest rates, they do seem to work.
On the other hand, we commissioned a study from the University of Bristol that warned about the dangers, if it is not done carefully, of letting the 'baseball bat brigade' into this industry.
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