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Coronavirus (COVID-19)—APPG on Fair Business Banking urges FCA to suspend imminent change to overdraft rules

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Published on: 27 March 2020

Published by LNB News

LNB News 27/03/2020

Document Information

Issue Date: 27 March 2020

Published Date: 27 March 2020

Jurisdiction(s): England, Northern Ireland, Scotland and Wales

Article summary

The All-Party Parliamentary Group (APPG) on Fair Business Banking has called on the Financial Conduct Authority (FCA) to suspend an imminent change to overdraft rules which will see some interest rates on overdrafts increase tenfold. Due to the new FCA rules, from April 2020, banks can only charge for overdraft users a simple annual interest rate—without additional fees and charges so that all users of unarranged overdrafts will be better off or see no change. In many scenarios, however, rates for users of arranged overdrafts will increase significantly, with some rising from as low as 3% to the new industry standard of 39.9%.

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