Payday Loans

Lord Davies of Stamford Excerpts

Wednesday 11th December 2013 Lords Chamber

[Lord Newby]

My Lords, a real-time database is one of the things that the FCA will be looking at. In some of the countries and US states where they have effective caps on the cost of payday loans, such systems have been seen to work efficiently and be very effective.

[Lord Davies of Stamford (Lab)]

My Lords, we heard a moment ago about the danger of lenders from other EU countries undercutting any legislation or regulation that we introduce in this country. Has the noble Lord considered discussing with the European Commission the possibility of legislating on an EU-wide basis for the single market as a whole?

[Lord Newby]

My Lords, this is a rapidly moving area. If you go back five years, it was not an issue. We are discussing with other member states the operation of the consumer credit directive, for example, and the way in which the market is evolving. As the FCA moves towards putting in place a cap of the total cost of payday loans, we will see exactly how the system is working in the majority of those member states that already have a cap and whether there is any real advantage in moving to a Europe-wide system, or whether the series of national caps is proving effective.