Financial watchdog to announce cap on payday loan costs -Sky

(Reuters) – Britain’s financial watchdog will say on Tuesday morning that it plans to impose a lower-than-expected cap on the cost of payday loans, Sky News reported, citing sources. The Financial Conduct Authority (FCA) is expected to restrict the total cost of credit charged by payday lenders to “significantly less” than 30 pounds for each 100 pounds lent to customers, Sky News said on its website. (http://bit.ly/1mbuaYI) It said the regulator’s figure would comprise the overall cost of credit, including the headline interest rate levied by payday lenders, as well as fees and other charges. The FCA, which declined to comment to Reuters regarding the report, said in March that it would consider capping the total cost of credit for all payday lenders from early next year, a step forced onto it by the government. [ID:nL6N0M830R] The watchdog had initially resisted moves to cap interest rates, saying it could drive customers into the arms of loan sharks. (Reporting by Richa Naidu in Bangalore)