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Banks: Interest Rates

Volume 481: debated on Tuesday 21 October 2008

To ask the Minister of State, Department for Business, Enterprise and Regulatory Reform with reference to the statement by the then Parliamentary Under-Secretary of State for Trade and Industry during the Second Reading of the Consumer Credit Bill of 9 June 2005, Official Report, columns 1405-06, what recent reviews his Department has undertaken of the need for caps on interest rates in the sub-prime lending market. (226532)

In line with the commitments made during the passage of the Consumer Credit Act 2006, the Government will review their policy on interest rate caps after the Act has been in force for three years with regard to all available evidence. The Department has not undertaken any specific reviews of the need for caps on interest rates since 2004, but my officials are keeping abreast of all academic research into this area and are currently in discussions with researchers who are examining the impact of similar reforms in Japan.