Ask your MP to vote Yes to cap the cost of credit

On 3 February, the House of Commons will vote on whether to support the introduction of a series of caps on the amount that payday and home credit lenders can charge for credit.
The motion has gained widespread cross-party support from MPs who recognise that the Government has a duty to intervene in the high-cost credit market, which is uncompetitive and often exploitative.

If enough MPs turn up on 3 February and vote for the motion, it will send a clear message to the Government that they need to act.

You can support this action by emailing your MP like I have using the End Legal Loan Sharking website.

My message to Ben Bradshaw reads as follows:


Dear Ben

I’m writing to ask you to help tackle legal loan sharking by using your vote on Thursday 3 February to send a message to the Government that they should cap the cost of credit to protect the poorest consumers in Britain.In 2008 alone, the high-cost market was worth £7.5bn, this is money extracted from low and middle income communities. This market can charge £82 in interest and collection charges for every £100 lent.

Recent research shows there has been a fourfold increase in the numbers of people borrowing from payday loan companies – charging interest rates of up to 2700% - since the start of the recession. 70% of payday loan users have a household income of below the mean UK average of £24,492.For more facts around high cost lending please see http://www.endlegalloansharks.org.uk/facts

A small group of companies dominate the market for home credit services, meaning little competition to keep rates affordable or offer an alternative to those for whom mainstream banks and building societies are out of reach. But you can change this.

On Thursday 3 February there will be a vote in parliament calling for a series of caps to be introduced on the market for unsecured lending, seeking to intervene where there is a lack of competition and clear evidence of consumer detriment. Crucially these will be calculated on the total cost of credit (rather than annual percentage rates) to make sure that the caps set do not distort the market or that lenders avoid them by applying high administration fees or repayment charges. Similar caps have been introduced in many other countries including America, Canada, Belgium, France and Germany. It is an effective and practical policy that could make a big difference to the finances of thousands of people in Britain.

If you would like more information about this motion, which has substantial backbench support across parliament, ahead of the vote please do contact the proposers – Stella Creasy and Justin Tomlinson.

As your constituent I hope you will vote yes for this motion to show action can and should be taken on this aspect of consumer credit. I would be grateful to know if you plan to attend parliament on this date and vote for this motion – or if you plan to vote against it. I look forward to your response