UK authorities propose new rules on payday loans

LONDON (AP) — British authorities have proposed new regulations for payday lenders, the firms that offer short-term loans at sky-high interest rates.

Under restrictions unveiled by the Financial Conduct Authority on Thursday, payday lenders will be required to carry out affordability checks on borrowers and restrict the number of times a loan can be rolled over. The regulator says it will also ban misleading advertisements.

The regulations are set to take effect next year after a consultation process.

The lenders have been criticized for taking advantage of consumers who are suffering in troubled economic times and who often turn to such lenders to buy food or in case of family emergencies.

The archbishop of Canterbury is among those who have expressed concern about such loans and has urged alternatives.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s