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MP backs payday loan interest cap

Foyle MP Mark Durkan.

Foyle MP Mark Durkan.

Derry’s MP has backed moves to curtail payday lenders.

SDLP MP Mark Durkan says he strongly welcomes Westminster government plans to allow restrictions to be imposed on the interest charged for so-called ‘payday loans.’

Mr Durkan, who sat on the Financial Services Bill Committee, has heavily criticised payday loan companies for pushing vulnerable people in Derry and throughout the North into debt by charging annual interest rates of up to 4,000 per cent per year.

He said:”The government has had a duty to intervene in the high-cost credit market, which is often uncompetitive and exploitative, and has seen payday loan companies charging annual interest rates of up to 4,000 per cent per year.

“This kind of lending – where greedy and unscrupulous loan companies prey on the financially excluded by offering easy credit at extortionate rates – has tipped so many people in Derry and throughout the North into inescapable cycles of debt and poverty.

“Whilst home-credit agencies, moneylenders and loan sharks are not a new phenomenon, in the current economic downturn they have become more prevalent, more pernicious and more profitable.

“It is only right that they have now stepped in to protect some of the poorest borrowers in society, rather than allow them to be exploited,” he said.

 

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