Groups encourage UK government to place rate caps on short-term credit

According to This is Money U.K, the Consumer Credit Counseling Service and End Legal Loan Sharking have major bones to pick with the payday lending industry within the U.K. A lower interest rate cap on "doorstep loan providers and payday loan firms" is at the moment being pursued in proposed legislation. Charging lower costs would be more reasonable for the ultimately legal form of consumer credit. Resource for this article – Groups urge UK government to place rate caps on short-term credit by Personal Money Store.

It is not the exact same as payday loaning to do legal loan sharking

Payday loans and loan sharking turn out to be within the very same place due to what End Legal Loan Sharking and mainstream media organizations say. That is the very same mistake politically motivated consumer organizations make in the U.S. The cash advance industry is governed by numerous legislative bodies in the U.K., notes Payday Loan Advances. The IPA and BCCA all regulate payday cash advances within the United Kingdom. That is the British Cheque Cashers Association and Insolvency Practitioners Association. APR is much more regulated in payday cash advances than in loan sharking.

Establishment believes in no costs

According to End Legal Loan Sharking’s figures, "loan sharks" can charge as much as £82 ($132) in interest and fees for every £100 ($160) borrowed. The payday lending organizations would have lots of risk loaning like that, This is Money forgets to mention. Hence, protection must be built in.

Keep in mind the ‘ten Minute Rule’

Labour MP Stella Creasy has championed a Ten Minute Rule that will reach British Parliament on Wednesday. This would result in being a new rule in the U.K. consumer credit market. It would allow those with bad credit to still borrow. There's a reason it is called the Ten Minute Rule. Only 10 minutes is needed to explain the bill.

"The Govt needs to understand action is needed now to address the high cost of loaning which exploits some of the poorest individuals in our communities who can least afford the charges door step lenders set," is what the British media reports Creasy saying.

The Ten Minute Rule would apply to payday lending. APRs and fees would be capped. It would also empower local authorities to restrict payday loan business licenses and increase consumer access to credit union loans.

Info from

Payday Loan Advances UK

paydayloanadvances.co.uk/Regulatory_Bodies.asp

This is Money UK

thisismoney.co.uk/credit-and-loans/dealing-with-debt/article.html?in_article_id=517528&in_page_id=62&position=moretopstories