Friday, 7 February 2014

Council to investigate payday loans

North Ayrshire Council is to investigate the impact on local people of debt created by payday loan companies charging soaring rates of interest, some as high as 4000%.

The local authority is to create a ‘short-life working group’, which it is hoped will deliver its findings by June of this year. The group will be chaired by Cllr Ruth Maguire, the Council’s Cabinet member for Finance, Corporate Support and Housing. At a previous meeting of North Ayrshire Council, Cllr Maguire, along with her SNP colleague Marie Burns, secured unanimous backing for a motion demanding the strongest possible action against ‘legal loan sharks’.

Ruth Maguire told the3towns, “North Ayrshire Council has for some time made clear its concerns that payday lending can damage local communities and families. At a time when households are under severe pressure, some payday lenders are condemning people to a lifetime of debt by failing to ensure that borrowers could afford to repay their loans.”

Cllr Maguire revealed that figures produced by Citizens Advice Scotland show more than 60% of payday loan applications are accepted by companies without any relevant financial checks, and that a majority of borrowers were not told how much it would cost to extend the loan if they could not repay the full amount in the designated time. The SNP councillor explained, “One horrific example saw a borrower paying £57 a month for 6 months, but was left still owing £437 on a £500 loan.”

The review to be carried out by the short-life working group aims to “result in action in terms of changing behaviour, minimising the promotion of payday-lending, and lobbying for change”.

Ruth Maguire said, “It's vital that the Council establishes the extent of the problem locally and also exactly what action NAC can take to assist matters.”

1 comment:

  1. it's really true word....


    “It's vital that the Council establishes the extent of the problem locally and also exactly what action NAC can take to assist matters.”

    ReplyDelete