A key element of the FCA's cost benefit analysis when introducing the price cap, was that the consumers who would be denied access to credit would end up better off. In other words, higher interest rates would be unaffordable for them.
With unsecured credit overall continuing to rise since 2013, and the Financial Policy Committee voicing concern about the wider impact on the UK economy, I suspect the FCA will come under increasing pressure to tighten its regulation of consumer credit more generally, including credit cards.
This may create a tension with the FCA's competition objective, which (like the CMA here) seems to see transparency and price competition as the way forward. Either way, affordability is likely to become a bigger issue for regulators and for firms' business models.
The Consumer Finance Association, which represents payday lenders, says the price cap has already resulted in 600,000 fewer consumers having access to credit.It says the number of loans being approved since 2013 has fallen by 42%.