Denton and Reddish MP, Andrew Gwynne, was angered that the High Cost Credit Bill, a private members’ bill which aimed to tackle many of the problems being caused by unregulated payday lenders was ‘talked out’ by a government backbencher last week, meaning it is now unlikely it will become law.
The Bill had been written in consultation with Citizens Advice, StepChange, Which?, and the Centre for Responsible Credit, as well as other MP’s involved in the APPG for Debt and Personal Finance, and it had attracted some cross-party support for it.
Labour has already campaigned vigorously to tackle payday lenders who are plagued high streets and are preying in the vulnerable. Some of these companies charge shocking levels of interest, up to 16,000% in the worst cases. Many are household names. Wonga, KwikCash, PaydayUK, QuikQuid, Cash Lady, Uncle Buck. The top ten charge interest rates of between 5,835% and 1,737%.
Payday lenders are causing serious debt problems for many people in Andrew’s constituency. Concerns about the sector have been reflected in a number of Parliamentary reports and debates. The recent decision by the OFT to refer the payday loans market to the Competition Commission provides further confirmation of the need for action.
Andrew Gwynne MP said:
“It is a massive disappointment that the Government allowed this landmark Bill to be talked out by its backbenchers. I have had a large number of letters from constituents who have been hit by these extortionate interest charges; this is a missed opportunity by this government to deal with the problems of pay day companies. Although the Bill come back to parliament in the Autumn, it is unlikely it will pass into law because it’s effectively dropped to the back of the queue of other Bills.”
The Bill required lending companies to regulate their advertising and ensuring clear information is provided on the cost of loans; required lenders to undertake affordability checks and limiting excessive charges; and would have introduced measures to protect borrowers in difficulty by requiring lenders to refer them to free independent debt advice.