Full Council | Notice of motion on the Charter to Stop the Payday Rip-Off

There was broad consent to the principles contained within the motion that I didn't get to make this speech:

Payday loans leave many people drowning in debt and it will take radical change to ensure that families do not pay a high price for being poor.

I want to be part of that radical change and I hope members in this Chamber want to be part of that radical change too

The FCA’s recent proposals for regulation are a step in the right direction, but they don’t go far enough.

I’m pleased to acknowledge the lead already given by Labour's Stella Creasy in the campaign agains payday loansharks. 

She has fought tooth and nail when the that the regulator was saying "look, we need the political will to make capping a reality".


The Coalition has now is listening and providing some of that political will.

I  believe irresponsible payday lending and other high cost credit is damaging the health and wealth of our country.

I’ve recently started volunteering at Exeter CAB

I’m seeing how these loansharks are having devasting effects on some of the most vulnerable of our society.

And those we are seeing over at Wat Tyler House are only the tip of the iceburg – the ones that have decided to come to ask Citizens Advice for help.

That’s a brave step.

But I want to help many more of Exeter’s residents who are tempted into using Payday loans to deal with what starts off as short-term problems but turns into long term debt

The report by the Church Action on Poverty and Centre for Responsible Credit "Stopping thepayday loan rip-off: how we can tackle the scourge of irresponsible lending" highlights the human cost – that irresponsible lending is forcing people into serious debt

The report contains a  quote from Clive Maxwell, Chief Executive of the Office of Fair Trading 

 “Competition appears not to be working properly in the payday lending market, allowing firms to profit from making loans that cannot be paid back on time.”

I hope members have taken the chance to read the actual Charter to Stop the Payday Loan Rip-Off based around Paul Blomfield’s High Cost Credit Bill.

If they did they would see that payday lenders are breaking promises they made in their own customer charter.

Self-regulation has failed.

I want to call for effective regulation of payday lenders and high cost credit, which is properly enforced, to:

· Stop them giving loans to people who can’t realistically afford to pay them back

· Stop them repeatedly rolling over loans and creating spiralling debt

· Stop hidden or excessive charges

· Stop them raiding borrowers’ bank accounts without their knowledge and leaving them in hardship

I also want action to support the growth of credit unions and other forms of more responsible lending; we want banks to increase the availability of credit to people on low and middle incomes: and we want new research on capping the total cost of credit undertaken now.

This is a ‘once in a generation’ opportunity to tackle this problem one and for all

If we  miss the opportunity,  payday lenders will be able to carry on exploiting people.

The Charter is based on Paul Blomfield’s High Cost Credit Bill which had cross-party support within parliament

I hope this notice of motion will get similar cross-party support in this Chamber

Sign the charter