Payday Loans: Join the fightback

Payday Loans: Join the fightback

The UK has become a magnet for payday loan companies that target the poor. Other countries limit the interest these companies can charge, but here in the UK the sky’s the limit, so more and more firms are moving in to make a killing. Along with the increasing demand for food banks, the proliferation of these companies on our high streets sum up what a harsh and unforgiving place Britain has become for the poor.

Payplan which provides free help with debts, has seen an explosion in the numbers of people in trouble with these loans, and most of them have borrowed to cover basic costs such as food and transport, not luxuries.

Next month we have a golden opportunity to do something about this. There is a crucial vote in Parliament (carried over from April 23rd) which should get the backing of every faith community in the country.

Stella Creasy, MP for Walthamstow, has tabled an Amendment to the Financial Services Bill which would give the new Financial Conduct Authority the power to put a cap on what loan companies can charge. There is a twitter campaign called #savebianca! after the Eastenders character with debt problems.

The Amendment has attracted real cross-party support, but the government is mysteriously opposed. It surely could not be connected to the fact that the owner of Wonga (representative APR 4214%) has donated around £600,000 to the Conservative Party. Could it?

The Archbishop of York recently said that the Church’s rhetoric on poverty was not matched by action. The Church has already shown its disapproval of payday loans by disinvesting in these companies.

By campaigning to get this Amendment passed, and calling on other faith communities to do likewise, the Churches could achieve something concrete to protect the poor from being ruthlessly exploited.

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© Bernadette Meaden has written about religious, political and social issues for some years, and is strongly influenced by Christian Socialism, liberation theology and the Catholic Worker movement. She is a regular contributor to Ekklesia.

Keywords: payday loans
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