High Cost Credit Bill
Debate between Paul Blomfield and Mark Durkan
Paul Blomfield
My hon. Friend makes an important point, and one that has been discussed previously in the House. The role of post offices could be significant; and, yes, I am aware of John’s work in Leeds, which it might be useful to share more widely with Members; it is a very positive initiative.
Mark Durkan (Foyle) (SDLP)
Does the hon. Gentleman recognise the apparent contradiction on the part of some people who support legislation capping credit union interest—currently at 2% per month, although the Government propose to raise it to 3%—yet oppose any cap on the sort of predatory creditors his Bill tries to target?
Paul Blomfield
The hon. Gentleman makes a powerful point, and one that rankles with credit unions as they try to develop their support for people.
The first set of measures in the Bill relates to advertising and information. Citizens Advice recently published results from its payday loan survey on implementation of the sector’s own good practice customer charter. It found that 21% of respondents were not clear about total repayment costs. The Bill would therefore require lenders to display interest payable in cash terms, so that people knew and could compare the cost of borrowing in a consistent way to be determined by the FCA. The Bill would also require that lenders state all fees and charges—crucially including default charges—and the circumstances in which those charges would be invoked on loan applications, so that people were clear about what they were committing to.
Many organisations are tackling the promotion of payday lenders in their own way. I am delighted that on Wednesday the university of Sheffield announced that it was banning payday advertising from its campus, which the National Union of Students has called for nationally. Many football clubs have also taken a strong stand. I congratulate Millwall, Bolton Wanderers and, although all my life my heart has been on the other side of the city, Sheffield Wednesday on the stands that they have taken.