The British Government’s shift in position which will see the introduction of a new law to cap the cost of payday loans is a “step in the right direction” for the thousands of people in Derry and the North – who have been found themselves in “inescapable cycles” of debt and poverty, Foyle SDLP MP Mark Durkan has said.
Foyle MP Mark Durkan signing the Charter to Stop the Payday Loan Rip-off with Labour MP Paul Blomfield.
Mr Durkan, who was one of 71 MPs who backed the Charter to Stop the Payday Loan Rip-off, has consistently pressed the government to introduce tougher regulation of payday lenders.
Welcoming the shift in the government’s position, he said: “I have been deeply concerned by the widespread irresponsible lending which has seen payday loan companies charging annual interest rates of up to 4,000 per cent per year.
“The government’s announcement that they plan to cap the total cost of credit charged by payday lenders is a welcome step in the right direction.
“This modified stance or shift in position by the government has been taken in response to the pressure from all who have backed the push for action on payday lending.
“However, capping the cost of credit is not enough. We need to see comprehensive action to protect people from being trapped in spiralling debt through unaffordable lending, ‘repackaged’ rollovers, bank accounts raided through the use of an unlimited number of successful continuous payment authorities and irresponsible advertising.”
Mr Durkan concluded: “This is a once in a generation opportunity to get the proper regulation and enforcement of payday lenders that we badly need. If the opportunity is missed then greedy and unscrupulous loan companies who prey on the financially excluded by offering easy credit at extortionate rates will be able to carry on exploiting people.”
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