PARLIAMENTARY WRITTEN QUESTION
Credit: Interest Rates (29 August 2014)

To ask Mr Chancellor of the Exchequer, what estimate his Department has made of (a) the number of payday firms that will be in operation and (b) the projected consumer demand for payday loans in (i) 2015, (ii) 2016 and (iii) 2017.

Asked by:
Mike Kane (Labour)

The Government has fundamentally reformed regulation of the consumer credit market. Responsibility for consumer credit regulation transferred from the Office of Fair Trading (OFT) to the Financial Conduct Authority (FCA) on 1 April 2014.

In the FCA’s consultation paper on the cap on the cost of payday loans, the FCA assesses that its proposals will lead to a risk of contraction in both the online and high-street markets. FCA modelling suggests that its cap proposals would mean at least one high street firm would continue to offer payday loans and at least the three largest online firms continuing in the market, although the FCA expects that more firms will be able to adapt their businesses to operate under the price cap and remain in the market.

Answered by:
Andrea Leadsom (Conservative)
5 September 2014