Paul Blomfield MP has responded to the Financial Conduct Authority's new rules for payday lenders which were published this morning. Paul Blomfield, who introduced legislation to regulate payday lenders into the House of Commons and developed the Charter the Stop the Payday Loan Rip-off, said:
"The new FCA rules address most of the issues in my High Cost Credit Bill, but I have concerns about how the rules will be enforced. The FCA needs a real-time database so that it can stop people being sold loans they can't afford to repay. And I want to see tougher rules on irresponsible advertising, for example around adverts viewed by children. The FCA also needs to ensure the new levy collected from payday lenders is used to provide more resources for the stretched debt advice services that are resolving the growing problems created by the sector.
"The campaign to stop the payday loan rip-off was always about regulation and enforcement; they’re two sides of the same coin. Payday lenders have shown time and again that they can’t be trusted to stick to the rules so for these proposals to have any impact, the FCA must police them and punish non-compliance. Millions of people who have been ripped off need a strong industry regulator and these FCA rules need to be more than words on a page. It’s essential that the FCA continues to work with politicians, debt and consumer groups and the public to get the regulatory framework right."
Notes for Editors
1. The FCA’s new policy statement is available at www.fca.org.uk/news/policy-statements/ps14-3-final-rules-for-consumer-credit-firms
2. Paul Blomfield MP developed the Charter to Stop the Payday Loan Rip-Off which is supported by some of Britain’s biggest debt, consumer and anti-poverty organisations – including Which?, Citizens Advice, StepChange Debt Charity, Church Action on Poverty, and the Centre for Responsible Credit.
3. The Charter has cross-party support from MPs from every party represented in Westminster, Councils across the Country and over 5000 members of the public www.change.org/paydayloancharter
4. Paul Blomfield’s High Cost Credit private members bill received cross-party support when it was introduced to Parliament in July last year.
5. Paul Blomfield was elected as the Labour Member of Parliament for Sheffield Central in 2010. He is a member of the Business, Innovation and Skills Select Committee and Secretary of the APPG on Debt and Personal Finance.