Payday lenders could be forced out of business as the industry faces up to tougher regulation, the head of the Financial Conduct Authority (FCA) said today.
Martin Wheatley is taking on responsibility for more than 500 payday loan firms as the financial regulator’s regime extends to the UK’s £200 billion consumer credit market following the abolition of the Office of Fair Trading.
“Our processes will probably force about a quarter of the firms out of the industry — and that’s a good thing, as those are the ones that have poor practices,” he told the BBC.
His comments come as the founder of the UK’s most high-profile payday lender, Errol Damelin, is poised to step down as chairman of Wonga.
Wheatley is attempting to get back on the front foot after leaks of an FCA review of 30 million pensions and policies sold since the 1970s wiped billions off the value of insurers last week.
Asked if he had considered his position, he replied: “No, I haven’t. I think I have got a big job to do.”