I welcome you, Mr Deputy Speaker, to our exciting debate this afternoon. The hon. Member for Walthamstow (Stella Creasy) opened the debate by saying that we had an opportunity to take action on these issues. I completely agree, so I am sure she is absolutely delighted to see how much the Government have done to protect consumers and take action in these areas.
We have debated a number of issues, and I shall run through them in turn. First, on the issue of high-cost or payday lenders, hon. Members will know—certainly the hon. Lady knows this, as we have discussed it before—that the Government have taken robust action to curb the harm these lenders can cause. On 1 April, responsibility for regulating payday lenders, along with all other consumer credit firms, transferred from the Office of Fair Trading to the Financial Conduct Authority, as mentioned by a number of Members. The Government strongly welcome the FCA’s new, tough rules for regulating payday lending. The FCA requires robust affordability checks, limits the number of times that a payday loan can be rolled over to two, and places tough restrictions on lenders’ use of continuous payment authorities. As highlighted by a number of Members, the Government have also legislated to require the FCA to introduce a cap on the cost of payday loans to protect consumers from unfair costs. The FCA will consult on its proposals for the cap in the summer, and it will be in force no later than 2 January 2015.
In addition, the FCA will thoroughly assess every payday lender’s fitness to trade as part of the authorisation process. Given the risks to consumers, the FCA has said that those firms will be in the first phase of firms and will be required to be fully authorised from October this year. The Government believe that the tough and decisive action the FCA is taking, including the cap on the cost of payday loans, will ensure that consumers are far better protected than they have been.