Attention class – today’s topic is payday loans. We all acknowledge something must be done, but what?
Problem with payday loans is they are very expensive. Solution?
“Ah, ummm, could it be...no too simple. Er, no, you've got me there.” *class shrugs*
Oh come on class it's not that difficult! Welby, what do you think?
“Er, might competition work if we sort of bolstered it? Just a thought.”
Anyone else? Wheatley?
“I've powers to limit the cost but I'm not at all sure using them to, er, limit the cost would, er, limit the cost?”
You at the back, Gibbons, thoughts?
“Please sir, could we cap the interest rate, making the cost lower and driving usurers out of business?”
Class rolls on the floor with laughter.
“Cap interest rates! Gibbons u fule, that would and end the problem! Then where would we all be??”
Dry, thorough, balanced, and inconclusive - 2010 OFT paper on evidence for and against credit cap worth reading http://goo.gl/xpa2ix