Call for input on high-cost credit and review of the high-cost short-term credit price cap

In this call for input we invite views on high-cost credit, including overdrafts, and on the high-cost short-term credit price cap.

Show Call for input (PDF)

Why we are publishing this paper

We committed in PS14/16 to reviewing the high-cost short-term credit (HCSTC) price cap in the first half of 2017. We have now also decided to look at high-cost products as a whole, to build a full picture of how these are used, whether they cause detriment and, if so, to which consumers.

This will enable us to consider whether further policy interventions are needed, and whether these should be more consistent across the market than they are at present.

The focus on overdrafts follows a number of competition issues being identified with this product, including poor price transparency and the nature and level of charges, especially for unarranged overdrafts.

We want to consider the consumer protection issues arising from this using our full range of powers.

Watch Andrew Bailey discuss our work on high-cost credit

View our infographic showing the changes we have seen in payday lending since we took over consumer credit regulation in 2014.

Who this applies to

This call for input should interest:

  • authorised firms with lending and credit broking permissions, including firms with interim permission
  • firms that are applying for, or considering applying for, authorisation to carry out these activities
  • trade bodies representing consumer credit firms
  • consumer organisations

Next steps

This call for input has now closed.  We published a Feedback Statement in July 2017 setting out our response.