The New FCA Regulations and Their Impact

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The New FCA Regulations and Their Impact
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The financial market felt a significant shake
down as the Financial Conduct Authority
introduced new payday loan directions for
standardizing high cost short term credit.  The
regulations implemented were aimed for
controlling unlawful loan hunters from ripping
off or misusing the current circumstances of the
customers, and ensuring that their benefits
remain secure, however the effect of these
regulations is yet to be seen.
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The Influential Regulations introduced in the
latest papers released by FCA  -1.      The
total initial cost applicable including interests
and other charges only will be 0.8 of the amount
of loan taken.2.      The interest on unpaid
amount is decided to be nothing less or more than
15. This initial rate will always be higher than
this default amount.3.      The new regulation
also ensured that in any possible situation the
consumer will never pay back the loan amount
which is more than double of the amount borrowed.
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Under the influence of FCA regulations the
already unregulated business sector became
united, moreover the consumer funding techniques
incorporated both loan based and investment based
consumer subsidizing. With effect of these
upgraded regulations all the loan lending
companies started feeling their responsibility on
the facts with which they used to entertain the
customers who came to them is search of financial
slots and for the services they promised to sell. 
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A legitimate permit was released for many of the
organizations which were subjected to word under
the Financial Conduct Authority. Commission based
offices got to be banned under FCA regulations
and further more in the lights of caps proposed
by FCA, many big loan and finance companies
marked edge of benefit got to be low. 
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Only the big name financial companies and loan
agencies who have shown the effect of their
presence and were distant for low wage families
generally, survived the trial.FCA always wanted
to have one solitary reputed big money lender and
three other agencies supporting it and looked to
filter all those finance and other payday lenders
from loan market who were not sure of changing
their business strategy and model. The regulation
stated that a consumer would never pay more than
200 for a loan of 100.
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The Actual Motives behind the Acts As per the
speculations of FCA total of 7 of borrowers in
UK never had any actual reason to borrow money.
The FCA regulations proved to be the blessing for
more than 70,000 consumers who used to seek
financial support from payday lenders. The effect
of the new rules was seen when 35 of borrowers
were cut short from the plates of payday lenders.
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The Loop Holes in New RulesFCA didnt look that
active in controlling the high rising
ramifications of ARPs while they it did put a cap
on payday lenders but ARP has no one to check
after it and assist it.  The situation is that if
someone buys a loan of 100 bucks, then he would
have to pay a high interest of 20 bucks in every
couple of days. Know this may didnt look that
much of a problem for high class, but is
certainly as alarming situation for middle and
low class families who have to choose whether to
eat dinner or to pay their bills.
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The new regulation marked a dead end for many
payday lenders and not more than four
organizations were able to survive the cap
applied by FCA.  The agencies who managed to turn
to face the situation easily have already changed
their loan lending limits and or were already
dealing in a less than market rate. 
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Now the catch is that with so many companies
closing their shutters which marks most of the
customers will drive their money acquiring needs
from the only survived high end agency, which
will give them a 100 monopoly over the financial
market. Zero competition and lack of options will
drive consumers in a straight line to the already
crowded agencies which will also mark the
downgrading standards and lack of service support
to the customers.
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The rules which were enforced to help the low
income families in the long run will only make
things worse for them. The 70,000 applications
which were found inappropriate for short term
loan under new FCA regulations will have to look
for other sources. And as per trusted sources 2
of these consumers that is 1400 people move to
the loan sharks who is return greet them with
high interests, and these payday lendings are
impossible to track so most of these loans will
never get noticed, which is also a big loss for
FCA. 
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  Moreover with new regulations there will be
chances that people may not get the full amount
as expected by them, and for the left money they
will turn to illegal loan sources. FCA needs to
understand that the high priority rules which
were introduced could only benefit the primary
consumers if they can motivate consumers against
illegal and unregistered loan agencies.
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