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08/120/2012 - Are Payday lenders going to be reigned in?

IN OCTOBER Solidarity commented on a worrying report from the TUC that families have to borrow more than £325 a month just to make ends meet. One item of special concern was that over four million people regularly had to turn to payday lenders. These lenders typically charge far higher rates of interest than would be levied on a loan from a high street bank and cases of as much as 4000% interest being charged are sadly not uncommon.
 

Trade Unions, MPs and even the incoming Archbishop of Canterbury have all expressed their concern about the payday lenders. Lord Mitchell has described this sector of the lending industry thus: “This is an industry run by cowboys on the fringes of legality”.

 

Some good news is that while an amendment to the Financial Services Bill going through the House of Lords that would have capped interest rates was unsuccessful, The Daily Mail of 29 November reports that Treasury Minister Lord Sasson has offered to “bring in a similar measure in exchange for the amendment being dropped”. Let us hope that the government is listening to the many people who have expressed concern on this issue. The last thing that working people need in these economically strained times is to be preyed upon by greedy finance companies.