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Govt poised to regulate payday loans

London UK Thames Parliament 480

The Government is poised to regulate the payday loans sector unless it creates a robust system of self-regulation.

Labour peer and Consumer Credit Counselling Service chair Lord Wilf Stevenson has pledged to lodge an amendment in the Financial Services Bill committing the Government to take action within a year.

The amendment was originally rejected in the Commons but Lord Stevenson is confident that changes to the Treasury team may see it accepted.

Speaking at a fringe event at the Liberal Democrat conference in Brighton yesterday, Lord Stevenson said: “Now we have personnel changes so maybe when we put down the same amendment in the Lords the Government will be able to accept it. The amendment calls on the financial authorities to come up with a scheme for regulating high-cost loans, or payday loans, within a year.

“The truth is that the people who earn least in our society have the most need to have access to short-term borrowing such a payday lenders so they can just get through the year.”

Speaking alongside Lord Stevenson, deputy chief whip Lord Dick Newby said the Government is ready to act.

He said: “Payday loans are a problem and the sector has said it will produce a code of conduct which will protect individuals from abusive behaviour by them.

“The Government’s view is that if they can do it quickly then that is fine but if they don’t then something will have to be done in this area. Self-regulation is good if you can get it but the track record of self-regulation is mixed.”

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  • Chris Gardner 1st October 2012 at 8:44 am

    I am no fan (or for that matter enemy of) payday loans, however the patronising tone of media commentary and the comments here disgust me.

    Why do you keep saying these people are vulnerable?

    A powerful word highjacked by hand -wringing liberals to describe an ever changing group of people in order to reference and validate in human terms a range of politically dogmatic views.

    What you are saying is that those with no or little money are vulnerable idiots, and those with money are financially astute. Outrageous!!

    No wonder working class people are so disenfranchised from the system with your persistant and downright insulting patronage.

    I wonder how many salesmen (oh sorry mortgage brokers and advisors) regularly use such services??

  • Russell Watson 27th September 2012 at 5:55 pm

    I agree with Steve… why does it take them so long to deal with something that should have been at the top of their list…these pay day loans affect the most vulnerable in our society. It goes to show you that politcians are even more out of touch!

  • PARACHA 27th September 2012 at 4:45 pm

    agree with steve : 3.47pm

    since the individuals taking out payday loans might easily be the most vulnerable and possibly the least financial astute consumers I feel for once as far as payday lending is concerned the sooner the industry is regulated and has a clear set of guidelines the better it would…

    since this might be a very lucrative industry as well with very high turnovers on lending/loans… if property regulated and managed this industry can then flourish in a way that might advantage lenders as well as consumers alike.

  • steve 27th September 2012 at 3:47 pm

    Rearrange to make a sentence.

    “Shut the horse stable the has bolted door after”

    Regulation that will again be at least 4 years too late. Great job