Payday loans cap
12th December 2013
UK Government urged to act quickly to end ‘culture of exploitation’.
Enterprise Minister Fergus Ewing today called on the UK Government to bring forward plans to introduce a cap on the cost of payday loans.
Mr Ewing said the cap must be in place by April 2014 in order to end the misery that unconstrained interest charges are piling on many people across Scotland.
Westminster has said that the cap will be introduced in January 2015 in measures being outlined as part of the Banking Reform Bill.
The StepChange debt charity recently reported that amongst their clients in Scotland, pay day loan debt accounts for the most dramatic rise in debts.
The Scottish Government has pledged to protect consumers pledging payday lenders would be subject to tougher regulation in an independent Scotland.
Speaking ahead of a payday lending debate in the Scottish Parliament, Mr Ewing said:
“I am very concerned that the growth of payday lending is perpetuating a culture of exploitation as high interest borrowing casts thousands of people in Scotland into a spiral of debt
“While we welcome the news that a cap will be introduced, it is long overdue and we are disappointed that it will not be come into force until January 2015 at the earliest.
“Another 12 months of unconstrained pay day lending will do nothing to address the very real financial pressures being faced right now by people across Scotland.
“I recently launched the ‘12 Days of Debtmas’ campaign aimed at people who may get into financial trouble in the run-up to Christmas by using high interest, short-term credit.
“The Scottish Government has made clear that with the powers of independence we would act immediately to bring pay day lending under control. I urge the UK Government to act and to act now.”
More information about the 12 Days of Debtmas’ campaign is available from the following link: www.12daysofdebtmas.com