Payday lending is a real concern of Lib Dem Vince Cable the Secretary of State leading the Department for Business, Innovation and Skills.

1 July a summit was held to review what the government is doing to sort the payday market mess inherited from when Labour were in power.

 

Government funded research by Bristol Universtiy and an Office of Fair Trading (OFT) report are clear that Payday lending isnt functioning in consumer’s interests and widespread non-compliance and poor practice is present.

We’re lucky that so far East Dulwich hasnt attracted a Payday lending ‘shop’ . I’ve only had a terribly sad case where an East Duwlci resident has been fleeced by excessive charges. I’m sure we have others locally.

The government through the OFT has stepped in and sent compliance letter to each of the 50 leading payday lenders who make up 90%+ of the market. Of the 21 responses so far 6 have decided to leave the payday market.  The remaining lenders have 12 weeks from receipt of these letters to prove they comply with regulations.

The OFT have already revoked 3 licences and another has been surrendered.

The OFT has also referred the whole market to the Competition Commission citing fundatemnetla problems with the way this market operates.

The Financial Conduct Authority (FCA) starts regulating consumerscredit from April 2014 and has already committed to prioritising action in the Payday market.

The government is also concerned about how the market is advertising and commissioned research into this. 

Finally to provide a better alternative the government has comitted £38m to support Credit Unions and has been doing other regulatory work to support Credit Unions.

So we’re less than a year away from the Payday loan market being a much healthier market.

Have you suffered in East Dulwich from the excess of this industry?