The Swindon Labour Group Leader is moving a motion at the full meeting of Swindon Council on 7 November calling for curbs to the amount of advertising space payday lenders are able to have in public spaces, and the Council inserting a target in its Corporate Strategy to promote the use of credit unions as a better alternative to offering short-term credit to families.
The motion also condemns practices used by payday lenders such as the exorbitant interest rates that they charge.
This motion follows the recent debate amongst national politicians and payday lenders about their practices with the Labour Party proposing to place a levy on payday lenders profits which will go towards boosting government funding to credit unions and North Swindon MP, Justin Tomlinson, calling for an increase in the licence fee required to be a payday lender and he has also signed a national Payday Loan Charter.
Councillor Jim Grant said: “The key message from this motion is that Labour believes Credit Unions are a much more appropriate money lender to provide short-term credit to people than payday lenders. Credit Unions are a body you can trust and are often embedded in communities, they will provide reliable and trustworthy financial advice and they won’t engage in irresponsible practices like 5000% interest rates causing misery to people who are often vulnerable.
"There was a time in the UK where people were able to receive short-term from credit unions and there was no such thing as payday lenders. Now the situation is that there are proliferations of payday lenders who are ruthlessly targeting people to use their company through advertisements and favourable positions on the High Street and shopping centres, in order to drive up their profits and there are far fewer credit unions. We want to reverse this trend and restore credit unions to their rightful place as the best and most-used bodies to provide short-term credit to people in need of it.
In Labour-controlled Plymouth they are already doing this, dramatically reducing the amount of advertising space payday lenders can use, while boosting capital for its credit unions to help support families in need of short-term credit and restoring credit unions to their rightful place on the high street. What we want is for Swindon to follow Plymouth’s lead and that is why I am bringing forward this motion.”
Councillor Grant’s motion reads:
Condemns many of the practices used by payday lenders and the negative effect their practices have had on some of Swindon’s residents.
Believes Credit Unions are much more appropriate lenders for helping Swindon residents in need of short-term credit and believes existing credit unions in Swindon need to be better promoted and more Credit Unions need to be encouraged in order to counteract the proliferation of payday lender companies in Swindon and to provide proper financial advice to residents when they take out loans.
Requests the Leader of the Council bring a report to Cabinet detailing how the Council could ban access to all websites advertising payday lenders on the Council’s entire computer network, including libraries and community centres and to ban payday lenders from advertising on hoardings in the Borough.
Requests the Leader of the Council to consider including within the Council’s Corporate priority “To together, find new ways to reduce vulnerability and improve health for all”, the promotion of more Credit Unions in the Borough as an alternative means of credit and financial advice to payday lenders for residents in the borough”