The head of the Financial Conduct Authority (FCA) has said that personal debt levels have risen to such a level that it deserves the attention of the financial regulator.
FCA chief executive Andrew Bailey said a payday lending cap had helped the consumer, but that the time has come for the entire market to come under inspection, rather than just specific sections.
The financial regulator has announced its targets for the year, which include plans to protect customers, studying savings and the close of the PPI scandal.
The deadline for PPI claims is August 2019 and the FCA is overseeing an awareness campaign to ensure pay-outs are claimed.
Mr Bailey said there had been a notable rise in the amount of consumer borrowing and echoed the concerns held by the Bank of England whose Financial Policy Committee said debt had drastically accelerated in the last year.
However, consumer credit lending still accounts for less than 10 per cent of all lending by UK banks to household borrowers.
A Lords committee also recently demanded stronger regulations, including a cap on “rent to own” products.
An FCA inquiry is already underway in to overdrafts, door-to-door lending and other forms of “guaranteed” loans.
They will be investigating and discussing the creation of a compulsory limit on overdraft charges.
The FCA’s mission statement highlights its need to remain “flexible” following Brexit.
“The UK’s decision to leave the European Union creates uncertainty for both the UK’s financial industry and the FCA,” Mr Bailey said.
“Both we and the government are keen to ensure that the financial services industry remains resilient and well placed to meet users’ needs and thus make the most of opportunities in a post-Brexit world.
“Leaving the EU inevitably creates a higher risk of disruption to our business plan priorities.”