In Plain English
AI-generatedIf enacted, the bill would create a legal maximum on the interest rates that lenders may charge on loans. The cap would be set and updated by future regulations, and the bill would establish how it applies to different types of lending and the penalties for breaches, along with related enforcement and transitional provisions.
Key Points
- A maximum interest rate cap for loans, to be prescribed by regulations, to protect borrowers from excessively high charges.
- Regulatory power to specify, review and adjust the cap, including which lending products are covered and any exemptions or transitional arrangements.
- Enforcement provisions and penalties for lenders that charge above the cap, with compliance reporting and oversight.
Who is affected?
Borrowers and consumers (especially users of high-cost credit)Lenders and credit providers (payday lenders, banks, building societies, credit unions)Small businesses and sole traders seeking financeRegulators and enforcement bodies (Financial Conduct Authority, Trading Standards)Consumer organisations and advisers
Generated 21 February 2026
