Speaking to Scottish Liberal Democrat autumn conference in Glasgow today, Scottish Liberal Democrat MP and Minister of State for Business and Consumer Affairs Jo Swinson set out how she was taking steps to build a stronger economy and a fairer society by tackling unscrupulous payday lenders.
In her speech to conference, Jo Swinson said:
Since becoming the Minister responsible last year, I’ve tackled this issue head on.
Last December we published research on the problems and options for action.
In March we saw the Office of Fair Trading announce a crackdown amidst evidence of the widespread failure of the industry to treat customers fairly.
In June the entire industry was referred to the Competition Commission for a full investigation.
In July I convened a summit to put the industry on make it crystal clear to the industry that they need to get their house in order or shut up shop.
And as a result of this tough action, 19 of the top 50 payday lenders have left the market, and a further 3 have had their credit licences revoked.
As a Government we have made clear the need to tackle the key problems, and we’re putting in place a tough new regulator with much sharper teeth.
Later this month tough new rules proposed for payday lenders will be published by the Financial Conduct Authority, which takes over responsibility for the industry from April. We have given them sweeping new powers to ban products, impose unlimited fines, and order firms to pay money back to consumers.
* Jo Swinson is Liberal Democrat MP for East Dunbartonshire, and was a Minister in the Department for Business, Innovation and Skills and Equalities Minister from 2012-15.
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9 Comments
Good on you Jo
You have demonstrated once again that when it comes to protecting the vulnerable there is only one Party that is prepared to go that extra mile –
With a few execptions Pay Day Loan Companies prey on the plight of individuals who fall on hard times either through bad fortune or incompetence and it is a disgrace that any loan company should be allowed to exploit them when what they need is support and assistance
I cant wait for the new rules to come in I hope they will include a cap on the top rate of interest 500% should be the absolute limit not 5000% Hope the new rules will also make the use of harassment and threats to recover the interest on loans illegal There is also a need to look at the methods that bailiffs use when dealing with defaulters Before court orders are granted the lenders whould be required to demonstrate that they checked the borrower had the ability to repay at the rate defined in the loan agreement
Fine, but where’s the analysis of why people are so desperate they resort to payday loans?
Here’s the analysis Ruth.
The Libdems and Conservatives introduced the Spare Bedroom Subsidy Tax and people clobbered by it need payday lenders to afford food.
I believe MP’s can claim £400 a month for food? No wonder they all look well nourished!
Jo Swinson will not be forgiving for her treachery.
If more employers paid a Living Wage rather than below the Minimum Wage as many do – if companies stopped exploiting wokforce with zero hour contracts – and energy companies stopped using their monopoly to hike the cost
of gas and electricity than the need for pay day loans may not be as great as it is now
Regulation is good when it improves confidence in an industry. However regulation is bad when it becomes excessive, drives out the competition, raises barriers to entry and therefore acts as a form of protectionism for big business and the rich. I feel that the left needs to be more aware of the benefits of regulation to big businesses, like Wonga.
I can’t help thinking there is a world of difference between the claim to be “tackling the issue head on” and faffing around for months on end with very little impact. The pay day loan companies are just legalised loan sharks so regualte what they can charge and solve the problem by tackling it head on.
Martin Caffrey – quite so.