Consumer groups within the U.K. like End Legal Loan Sharking are foaming at the mouth over their anti-payday lending proposal to Parliament, writes This is Money U.K. Lowering the allowable interest rate charged by "doorstep loan providers and payday advance firms" is first on their agenda. Charging lower costs would be more reasonable for the ultimately legal form of consumer credit. Source for this article – Groups urge UK government to place rate caps on short-term credit by Personal Money Store.
Legal loan sharking isn’t payday lending
End Legal Loan Sharking and mainstream media say the exact same things. They say that payday loans and loan sharking are the same kind of business. That is the exact same mistake politically motivated consumer organizations make within the U.S. The payday advance industry is governed by numerous legislative bodies within the U.K., notes Payday Loan Advances. The IPA and BCCA all regulate pay day loans within the United Kingdom. That is the British Cheque Cashers Association and Insolvency Practitioners Association. Thus, when in contrast to loan sharking, such payday advance features as APR are more highly regulated.
Business states there shouldn't be costs
Figures from the End Legal Loan Sharking show how much "loan sharks" are legally allowed to charge. Each and every £100 ($160) borrowed can mean £82 ($132) is charged in interest. The payday loaning organizations would have a lot of risk lending like that, This is Cash forgets to mention. Hence, protection must be built in.
A 'Ten Minute Rule’
Wed, British Parliament will review a 10 Minute Rule coming from Labour MP Stella Creasy. Those with poor credit would be more likely to borrow with the open consumer credit market that this rule would start within the U.K. It’s called a Ten Minute Rule as the supporter has 10 minutes to make the case for the bill in question.
"The Govt needs to understand action is needed now to address the high cost of loaning which exploits some of the poorest people in our communities who can least afford the charges door step loan companies set," is what the British media accounts Creasy saying.
Payday lending APRs and fees would be capped with the Ten Minute Rule. Licenses would only be given to those the local authorities chose to give them too. Also, customers would have more access to credit union loans that are available.
Articles cited
Payday Loan Advances UK
paydayloanadvances.co.uk/Regulatory_Bodies.asp
This is Money UK
thisismoney.co.uk/credit-and-loans/dealing-with-debt/article.html?in_article_id=517528&in_page_id=62&position=moretopstories
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