LONDON — LONDON (AP) — British authorities have proposed new regulations for payday lenders, the firms that offer short-term loans at sky-high interest rates.
Under restrictions unveiled by the Financial Conduct Authority on Thursday, payday lenders will be required to carry out affordability checks on borrowers and restrict the number of times a loan can be rolled over. The regulator says it will also ban misleading advertisements.
The regulations are set to take effect next year after a consultation process.
The lenders have been criticized for taking advantage of consumers who are suffering in troubled economic times and who often turn to such lenders to buy food or in case of family emergencies.
The archbishop of Canterbury is among those who have expressed concern about such loans and has urged alternatives.