Nottingham economist advises financial regulator on Rent-to-Own price cap

John Gathergood designed and implemented research in conjunction with the Financial Conduct Authority (FCA) that has resulted in the FCA consulting on a policy to limit prices and interest charges in the Rent-to-Own retail market. This project builds on the FCA's design of a price cap for the payday lending market.

John's research on the effects of payday loans, recently published in the Review of Financial Studies, was the basis for the imposition of a price cap on payday lenders. The price cap resulted in collective savings of £150 million among users of payday loans. Announcing the rent-to-own policy, FCA Chief Executive Andrew Bailey stated: "We want to stop consumers having to pay many multiples more than the price of a product on the high street. These changes build on the measures we have already taken across the high-cost credit sector."

The consultation paper is available to view.