The UK’s Financial Conduct Authority announced Tuesday that it is considering implementing new, strict price caps on payday loan companies in a move that, while aiming to protect consumers, could actually harm competition.
Reports say authorities may impose lending cap costs at .08 percent a day and 100 percent overall, meaning consumers would never pay more than double what they initially borrowed. The rules would go into effect in January after the FCA launched an investigation into the payday loan industry.
The regulator acknowledged that these new caps could cause smaller lenders to exit the market, and some have raised concerns that it would harm competition. But the FCA addressed those concerns, noting that its “analysis is that for online firms, we do not expect the [new rules]…to reduce competition, given that price competition is already limited. More firms does not necessarily equate to better quality products.”
The FCA added that its analysis aligns with that of the Competition and Market Authority’s, as both watchdogs found “that a small number of firms have a high market share without evidence of smaller firms exerting price pressure on them,”
Full content: City AM
Want more news? Subscribe to CPI’s free daily newsletter for more headlines and updates on antitrust developments around the world.
Featured News
Uruguayan Antitrust Scrutiny Puts Major Meatpacking Deal Between Marfrig and Minerva on Hold
May 19, 2024 by
CPI
Alaska Airlines Seeks Dismissal of Consumer Lawsuit Over $1.9 Billion Hawaiian Airlines Buy
May 19, 2024 by
CPI
Idaho Attorney General Orders Split of Kootenai Health and Syringa Hospital
May 19, 2024 by
CPI
Court Rejects T-Mobile’s Appeal Bid in Antitrust Case Over Sprint Merger
May 19, 2024 by
CPI
Google Requests Judge, Not Jury, to Decide on Antitrust Case
May 19, 2024 by
CPI
Antitrust Mix by CPI
Antitrust Chronicle® – Ecosystems
May 9, 2024 by
CPI
Mapping Antitrust onto Digital Ecosystems
May 9, 2024 by
CPI
Ecosystems and Competition Law: A Law and Political Economy Approach
May 9, 2024 by
CPI
Ecosystem Theories of Harm: What is Beyond the Buzzword?
May 9, 2024 by
CPI
Open Ecosystems: Benefits, Challenges, and Implications for Antitrust
May 9, 2024 by
CPI