The Financial Conduct Authority (FCA) is responsible for regulating high-cost credit in the UK. I know that in a letter to payday lenders in October 2018, the FCA said they should reassess the quality of their affordability tests. The Government says the FCA has tough enforcement powers to protect consumers and act against firms that do not meet its standards. It states that since 2014, the FCA has been proactive on consumer credit, to ensure that all consumers who use high-cost credit products are treated fairly.
However, I believe we need urgent action from the Government to change this broken model of consumer credit and review the way lending is regulated. The business model of payday lenders such as Wonga, which collapsed in August this year, is exploitative and immoral. I believe they demonstrate much of what is wrong with our economy: too many people stuck in insecure employment and reliant on short-term debt to keep their heads above water.
I am committed to tackling the issue of high-cost credit not only by capping exploitative lending, but also by lifting living standards to stop working families from become trapped in debt, increasing real wages and ending austerity. I can assure you that I will continue to push for action on this issue at every opportunity.