Credit: Interest Rates

Treasury written question – answered on 9th September 2013.

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Photo of Dan Jarvis Dan Jarvis Shadow Minister (Culture, Media and Sport)

To ask the Chancellor of the Exchequer what steps he plans to take to reduce the number of people using high interest lenders.

Photo of Sajid Javid Sajid Javid The Economic Secretary to the Treasury

The Government wants to see a well-functioning consumer credit market, where consumers can access the credit products they need and can be confident that lenders behave responsibly and treat them fairly. The Government is transferring regulatory responsibility for the consumer credit market, including high cost credit, to the Financial Conduct Authority (FCA) from next April. The FCA will have robust powers and take a more rigorous and responsive regulatory approach in order to better protect consumers.

The Government is also supporting the provision of alternatives to high cost credit. The Government is committed investment of up to £38 million in credit unions to increase access to affordable credit for at least 1 million more people and save consumers up to £1 billion in loan repayments by March 2015. The Government is also raising the maximum interest rate credit unions can charge per calendar month from 2% to 3%, coming into force on 1 April 2014.

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