Payday Loans
Debate between Lord Popat and Lord Martin of Springburn
Lord Popat
My noble friend makes a very valuable point. That is why the Government are now clamping down on these payday lenders, particularly through our Office of Fair Trading. Unfortunately, the noble Lord is right about the rollover of interest costs, which are quite astronomical to borrowers. That is why enforcement action is being taken as quickly as possible.
Lord Martin of Springburn
My Lords, what steps are being taken to encourage more credit unions throughout the United Kingdom so that people in the poorest communities in our land do not have to turn to payday loans and illegal moneylenders?
Lord Popat
I thank the noble Lord for that question. Yes, we are expanding credit unions, which offer affordable credit and real help for people who might otherwise borrow money from high-cost lenders such as the payday lenders. The British Bankers’ Association is also looking into this to see what bankers can do to help people with a short-term overdraft or a temporary loan when they are in a difficult situation.