Page last updated at 17:17 GMT, Wednesday, 5 December 2012

Financial Services Bill

Peers have passed the Financial Services Bill after it completed its third reading on 5 December 2012 with an amendment to strengthen the laws on payday loans.

The amendment, which had cross-party support, including support from the Bishops, would allow the interest rate on the loans from payday companies to be capped.

Shadow treasury spokesman Lord Mitchell said he was "astonished and delighted" at the government's decision to accept the amendment that he had originally tabled.

He said the government recognised that the "political and moral arguments were against them".

Payday loans are short-term unsecured loans, often with high interest rates, which critics say are disproportionately used by people already in financial hardship.

The main focus of the bill is to overhaul regulation of the financial services sector.

The bill will overhaul regulation of the financial services sector, by giving the Chancellor the power to veto decisions made by the Bank of England when dealing with bank bailouts and other interventions.

It proposes replacing the so-called tripartite structure, introduced by the previous Labour government, under which oversight of the banking system is shared between the Bank of England, the Financial Services Authority (FSA) and the Treasury.

The Financial Services Bill was introduced in the 2010-12 session of Parliament and a carry over motion was passed on 6 February 2012.

Having passed both Houses of Parliament it now needs Royal Assent to become an Act of Parliament.

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