Friday, 28 June 2013

I am backing Paul Blomfield's private member bill to regulate payday loan companies

Last week Paul Blomfield introduced his Private Members Bill on High Cost Credit which aims to tackle the problems being caused by payday lenders. Paul has written the Bill in consultation with Citizens Advice, StepChange, Which?, and the Centre for Responsible Credit, as well as other MP's involved in the APPG for Debt and Personal Finance, and it has attracted broad cross-party support for it.

Much of the credit must go to my Labour colleague, Stella Creasy MP (Walthamstow) who has led the campaign to tackle payday lenders who are plaguing our high streets and preying in the vulnerable. You will have no doubt read about the shocking levels of interest charged by such companies, up to 16,000% in he worst cases. Many are household names. Wonga, KwikCash, PaydayUK, QuikQuid, Cash Lady, Uncle Buck. The top ten charge between 5,835% and 1,737%.

Payday lenders are causing serious debt problems for many people in many constituencies. Indeed, concerns about the sector have been reflected in a number of Parliamentary reports and debates. Ysterdays’s decision by the OFT to refer the payday loans market to the Competition Commission provides further confirmation of the need for action.

The High Cost Credit Bill aims to tackle the problems that are being caused by payday lenders in a number of ways: by regulating their advertising and ensuring clear information is provided on the cost of loans; requiring lenders to undertake affordability checks and limiting excessive charges; and introducing measures to protect borrowers in difficulty by requiring lenders to refer them to free independent debt advice. If you’d like more information about the Bill please do get in touch.